Bank stocks are often perceived to be a harbinger of broader economic trends so BankerAdvisor wheeled around some of the big banks’ reported second quarter earnings to spot broad movements

Tea Leaves and Emerging Economic Trends

Arundel AG is a publicly traded financial services holding company based in Zurich. Arundel provides financial services across developed and emerging markets including investment banking and investment management services to public and private companies.
 
 

United Kingdom

Europe

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Arundel Reviews 2024 | BankerAdvisor

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Almost one-third of startups bought by SPACs in 2021 anticipate slower revenue growth with the SEC questioning of revenue projections and warned that it could require some SPACs to restate their financial results. 

SPACs: End of the Beginning or Beginning of the End?

Fewer IPOs, a down market and the specter of recession don’t necessarily equal fewer mergers according to M&A research reports, easy access to low interest capital and a recovering post-pandemic global economy would help deal makers.

Have M&A Trends Flipped for 2022?

TD Bank Group  and Cowen Inc. today announced a definitive agreement for TD to acquire Cowen in an all-cash transaction valued at US$1.3 billion.

TD to Expand its U.S. Investment Banking Business and Capabilities with Acquisition of Cowen Inc.

Recent figures compiled by M&A and corporate finance firm Hampleton Partners show a 46 percent increase in fintech deals in the first half of 2022 compared with 2021 and a 70 percent increase compared with the first half of 2019 pre-pandemic deals.  Steady valuation, the availability of capital, and high-growth fintech companies make the fintech M&A market attractive. 

Fintech M&A on the rise as valuations crumble

JPMorgan Chase & Co. and Goldman Sachs Group Inc. were one and two in the rankings in investment banking revenue in 2022 with Bank of America Corp. in third in a year of shrinking business. The top 10 investment banks on Wall Street booked $56.4 billion in revenue in 2022 as of Sept. 14, down nearly 39% from $92 billion in 2021 as of the same date, and about 8% lower than 2020’s tally of $61.3 billion.

JPMorgan and Goldman are still top dogs in investment banking but business shrinks significantly in 2022 

Banks looking to boost their digital capabilities reportedly may be taking a closer look at acquisitions of FinTechs as the valuations of FinTechs have fallen 70% this year.  The decline in FinTech valuations has been driven by the economic downturn, rising interest rates, and lower investor confidence after the collapse of the cryptocurrency exchange FTX. In addition, banks earnings have increased as their lending business benefits from rising interest rates, and it’s easier for banks to buy FinTechs than to merge with other banks because the latter involves more regulatory scrutiny.

FinTech Winter May Lead Banks to Increase Acquisitions 

St. Louis-based investment bank Stifel Financial has agreed to acquire Torreya Partners, an M&A and private capital advisory firm specializing in life sciences. The acquisition of Torreya adds 40 professionals in the healthcare sector and expands Stifel’s advising in royalty monetization and licensing agreements, and it will also grow Stifel’s presence in Europe.

Stifel Financial swallows life sciences investment bank Torreya Partners

Swiss banking giant Credit Suisse on Wednesday saw its shares fall to a new record low, pressuring the broader market and the rest of the European banking sector days after two lenders collapsed in the U.S.  Credit Suisse shares fell as much as 23%, extending the declines that seen its shares drop 75% over the last 52 weeks. On Tuesday, Credit Suisse said in its annual report that it had material weaknesses in financial controls. Credit Suisse has lost money for five straight quarters, and its wealthy clients in the fourth quarter withdrew about $100 billion from the bank.

Credit Suisse shares tumble to new record low as European banking sector reels 

Federal Reserve Chair Jerome Powell finds himself in a difficult place that no central banker wants to be: working to avert a credit crunch, which calls for looser monetary policy, while fighting high inflation, which demands the opposite. Strains in the banking industry, which followed the collapse of three midsize lenders this spring, help explain why some central bank officials are leaning toward holding interest rates steady at their meeting this week—even though the economy and inflation haven’t slowed as much as they expected.
But current and former central bankers say if stresses worsen, the Fed will face a more difficult trade off. Powell and his colleagues would have to choose between focusing on failing banks or high inflation.

Jerome Powell’s Big Problem Just Got Even More Complicated

Mizuho Financial Group is forging further into U.S. investment banking through a deal to buy Greenhill & Co. as it seeks to accelerate growth.
The Japanese banking giant agreed to buy Greenhill for $15 a share in an all-cash transaction, which values the firm at $550 million including debt, the firms said Monday in a statement. The lender will retain Greenhill's leaders, including Chief Executive Officer Scott Bok, who will be chairman of mergers, acquisitions and restructuring.

Mizuho to buy investment bank Greenhill for $550 million

Investment bankers’ advisory fees have plunged to the lowest level in almost a decade because of a prolonged slowdown in deal activity. Fees for completed mergers and acquisitions globally plummeted 35 percent in the first half of the year to $12.8bn compared with 2022, the lowest level since 2014, according to data provider Refinitiv.
Global M&A fell 38 percent to $1.3tn in the first half, the lowest deal volume since the start of the coronavirus pandemic in 2020, as higher interest rates, stricter antitrust enforcement, and geopolitical tensions hit the market.


FirstFT: Bankers’ fees plunge to near-decade low

The volume of deals worldwide valued at more than $100 million plunged 37% to just 280 during the first half of this year, undercut by rising interest rates and a gloomier outlook for the global economy, Willis Towers Watson said Thursday. “A perfect storm of higher inflation, interest rates, capital costs and greater regulatory scrutiny, combined with major geopolitical headwinds and a banking crisis, have triggered a steeper drop-off in M&A activity than anticipated by the market,” David Dean, a North America managing director at WTW, said in a statement.

M&A plunges 37% during first half of 2023: WTW

SVB Financial Group, the former parent company of Silicon Valley Bank, has entered into an agreement to sell its investment banking business, SVB Securities, to a group led by Jeff Leerink, SVB Securities’ CEO and founder, and backed by funds managed by hedge fund firm The Baupost Group.

SVB Financial Group agrees sale of its investment banking business, SVB Securities

For two long years private companies have spurned public markets, as rising interest rates dashed lofty valuations and stock prices vacillated. All this has been bad news for Wall Street. In 2021 America’s five largest investment banks together earned an average of $13bn per quarter through their dealmaking and initial-public-offering (IPO) desks. Over the next two years they managed barely half of that.

Wall Street is praying firms will start going public again

Goldman Sachs Asset Management is reportedly planning a major expansion of its private credit portfolio. The Wall Street giant aims to grow that portfolio to $300 billion in five years, up from $130 billion, a senior executive told Reuters Tuesday (March 12). “It’s a huge opportunity,” said Marc Nachmann, Goldman Sachs’ global head of asset and wealth management. According to the report, Goldman has loftier goals than other banking titans. For example, Morgan Stanley is planning to double its private credit portfolio to $50 billion, while JPMorgan Chase has set aside at least $10 billion for private credit. 

Goldman Sachs Aims for $300 Billion Private Credit Portfolio

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