Latest news with #BarclaysPlc
Yahoo
28-05-2025
- Business
- Yahoo
Path of Least Resistance for Stocks Is Higher, Barclays Says
(Bloomberg) -- Investor exposure to equities is still low enough that the 'path of least resistance' for the market is higher, according to strategists at Barclays Plc. NY Wins Order Against US Funding Freeze in Congestion Fight The team led by Emmanuel Cau said institutional investors weren't a big part of the stock rebound in May, with positioning remaining broadly underweight. Absent a volatility shock, 'systematic buying could continue to help equities to grind higher,' Cau wrote in a note. The MSCI All-Country World Index has rallied 5.7% in May, tracking its best month since November 2023, as global trade tensions eased. Still, risk appetite was dented last week by investor concerns around the US fiscal deficit. All eyes are now on Nvidia Corp.'s earnings report, due later Wednesday, for clues on demand for artificial intelligence, which has powered much of the rally in tech megacap stocks. US-domiciled investors sold domestic stocks and bought international equities in May, Cau said, although the 'sell America' trade is largely concentrated in the dollar and bonds. Meanwhile, repatriation into Europe has paused with limited selling of US assets by European investors. Cau correctly predicted earlier this month that a de-escalation in the US-China trade war would boost stocks. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P. Sign in to access your portfolio
Mint
26-05-2025
- Business
- Mint
Ring-Fencing Was a Good Idea That UK Banking No Longer Needs
(Bloomberg Opinion) -- UK banks want the government to abolish a key piece of post-financial crisis regulation that forces them to keep ordinary depositors' money legally separate from their trading and investment-banking business. This uniquely British setup, known as ring-fencing, limits the kind of lending banks can do and raises their costs. Well, most lenders don't like it. Barclays Plc alone is happy with the rules, which may be because it is uniquely placed to benefit from any protections they afford. I was always a big supporter of the idea behind this separation, but I'm no longer convinced the setup achieves much at all — for depositors or for Barclays. Ring-fencing is back in the news as the UK government looks desperately for anything that might stimulate investment and growth. The Bank of England is looking at ways to further relax their impact after having already made some changes in February. Big banks wrote to Britain's finance minister, Rachel Reeves, last month saying the rules should be scrapped, and a string of executives from large and small banks gave more views in front of a parliamentary committee last week. Vim Maru, chief executive officer of Barclays UK, reiterated the bank's case that the cordon around retail deposits has boosted financial stability and trust in lenders. Other countries have seen banks stumble and fall in the past couple of years, he said, while the UK has been immune. 'I think that is because we have ring-fencing,' Maru said. Other big banks, like HSBC Holdings Plc and NatWest Group Plc, complained about the additional costs for IT services, reporting and governance (a ring-fenced subsidiary needs its own independent board of directors). Executives also claim it leaves them stuck with redundant cash. 'I really think that a review now, to try to recalibrate that so that you are putting more oxygen into the economy, would be timely,' Ian Stuart, CEO of HSBC UK, told the committee. He also pointed out that US investment banks with small retail brands are free to raise UK deposits and use them wherever in their investment banks they wish. Ring-fencing doesn't apply until deposits exceed £35 billion ($47 billion), which rose from £25 billion in February. So, Chase UK — the British digital brand of JPMorgan Chase & Co. — or Goldman Sachs Group Inc.'s Marcus can use ordinary people's cash for 'casino banking,' but Barclays, HSBC or NatWest can't. In the context of JPMorgan's massive balance sheet, UK deposits aren't much, but they're still a nice source of a little cheap money, and US lenders don't need any more competitive help. The ring-fencing threshold was raised to give small, local challenger banks and fintechs room to grow, but for them this isn't the hurdle that hurts. Starling Bank Ltd. and peers such as Monzo Bank Ltd. are less hemmed in by lending restrictions and more by capital requirements that kick in sooner. The so-called MREL rules govern how much equity and loss-absorbing debt a bank must issue and start to apply when total assets reach £15 billion to £25 billion. Raman Bhatia, Starling CEO, told Parliament on Thursday that small lenders' capital requirements can jump by up to two times at that point. This is a much lower boundary than in Europe, where MREL rules start applying to banks with assets of €60 billion ($68 billion) to €100 billion, according to industry executives. If the ring fence isn't a competition for challenger banks, it might be for JPMorgan's Chase UK brand, which would need lending restrictions, an independent board and so on if it wanted to compete harder with Britain's four big incumbents on their own turf. Maybe that's a benefit to Barclays. Its UK business is good but produces a lower return on risk-weighted assets than HSBC's UK business, while also deploying more of its deposits into lending than HSBC. Still, if JPMorgan really saw value in taking on UK lenders, it could afford to go after market share with or without the ring fence. The real value for Barclays might instead lie in the size of its investment bank, which is a much bigger proportion of the group than for peers. Trading and capital markets account for 56% of Barclays risk-weighted assets, although it has a target to get that down to 50%. At HSBC, the whole corporate and institutional unit, which is a broader business than straight investment banking, accounts for 46% of the balance sheet. At other UK lenders, the proportion is lower still. So perhaps Barclays is more worried than rivals about testing depositor trust if they realized they were relatively more exposed to global financial markets. It's possible, but I'm dubious it makes any difference. Inside the ring fence, retail deposits are mostly insured up to £85,000 — which could soon rise to £110,000. And that insurance is paid for by industry levies, not the taxpayer. If ordinary people are aware of ring-fencing at all, they'll be more aware of deposit insurance and the protection that gives them. If government or regulators really believe removing the ring fence increases the likelihood of bank runs, a sensible countermeasure could be to increase the scale of the deposit insurance fund to reassure people about the speed of recoveries if a big bank fails. The final part of ring-fencing that really matters is the assurance it gives that a UK retail bank's core services will continue to function if the larger group it's part of gets into real trouble. But even that is also covered by the detailed resolution planning regime that banks must meet. Ring-fencing was a good idea that has become redundant. Scrapping it won't boost UK growth suddenly — it'll take several years to pass and then implement the legislation, while banks will face another round of costs to restructure their businesses again. But it does just seem like a friction that no longer serves a purpose. More From Bloomberg Opinion: This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Paul J. Davies is a Bloomberg Opinion columnist covering banking and finance. Previously, he was a reporter for the Wall Street Journal and the Financial Times. More stories like this are available on
The Star
20-05-2025
- Business
- The Star
Goldman Sachs leads in patchy year for foreign banks in Japan
TOKYO: Goldman Sachs Group Inc was among major global banks to post lower profit in Japan last year, pulling back from a bumper 2023. Net income at Goldman Sachs's local securities arm fell 30% in the year ended Dec 31 to 27.6 billion yen (US$190mil), down from a 14-year high marked in the previous year, a filing showed. Barclays Plc and Deutsche Bank AG also posted double-digit declines in profit at their Japan investment banking units in a reversal from the previous year's stellar showings, owing partly to weak fixed-income trading. In contrast, Bank of America Corp's local arm returned to profit, while UBS Group AG's saw net income jump 82%. The varied results suggested that 2024 was a tricky year for the world's largest lenders operating in Japan, as investors adjusted to rising interest rates. The country's markets saw the most extreme moves in decades in August, with stocks tumbling the most since the October 1987 crash and bond price swings hurting some traders. 'This doesn't mean that the heat has died down and there will be another period of stagnation,' said Hideyasu Ban, a Bloomberg Intelligence senior analyst. 'The revenue pool for investment banks has grown as Japan's economy and market conditions normalise, resulting in improvements in their profit margin.' Even though its earnings fell, Goldman Sachs's local unit kept its spot as the most profitable among foreign banks that close their books in December, earning three times more than its closest rival. The drop in profit came as it booked higher liability reserves in line with an increase in trading volume. Barclays' ranking rose by a notch to second place. The UK bank is seeking to strengthen its yen interest rate business to capitalise on Japan's bond market revival. Its fee-based financing business should be able to generate profits without being significantly affected by market volatility, a spokesperson for Barclays Securities Japan Ltd said. — Bloomberg
Mint
19-05-2025
- Business
- Mint
Goldman Sachs Leads in a Patchy Year for Foreign Banks in Japan
Goldman Sachs Group Inc. was among major global banks to post lower profit in Japan last year, pulling back from a bumper 2023. Net income at Goldman Sachs's local securities arm fell 30% in the year ended Dec. 31 to ¥27.6 billion , down from a 14-year high marked in the previous year, a filing showed. Barclays Plc and Deutsche Bank AG also posted double-digit declines in profit at their Japan investment banking units in a reversal from the previous year's stellar showings, owing partly to weak fixed-income trading. In contrast, Bank of America Corp.'s local arm returned to profit, while UBS Group AG's saw net income jump 82%. The varied results suggest that 2024 was a tricky year for the world's largest lenders operating in Japan, as investors adjusted to rising interest rates. The country's markets saw the most extreme moves in decades in August, with stocks tumbling the most since the October 1987 crash and bond price swings hurting some traders. 'This doesn't mean that the heat has died down and there will be another period of stagnation,' said Hideyasu Ban, a Bloomberg Intelligence senior analyst. 'The revenue pool for investment banks has grown as Japan's economy and market conditions normalize, resulting in improvements in their profit margin.' Even though its earnings fell, Goldman Sachs's local unit kept its spot as the most profitable among foreign banks that close their books in December, earning three times more than its closest rival. The drop in profit came as it booked higher liability reserves in line with an increase in trading volume. Barclays' ranking rose by a notch to second place. The UK bank is seeking to strengthen its yen interest rate business to capitalize on Japan's bond market revival. Its fee-based financing business should be able to generate profits without being significantly affected by market volatility, a spokesperson for Barclays Securities Japan Ltd. said. BofA Securities Japan Co. made ¥7.5 billion in profit after losing ¥6 billion in the previous year. The unit of the Charlotte, North Carolina-based lender recorded sharp gains from stock and bond trading. Consolidated profit from UBS Securities Japan Co. and its majority stake at joint venture UBS SuMi Trust Wealth Management Co. surged as markets business, investment banking and wealth services did better, according to a spokesperson. Citigroup Inc. finished the year in third place after net income at its Japan securities arm fell 33%. Headcount at the firm was the highest among the global banks, even as it reduced staffing by the most last year. This article was generated from an automated news agency feed without modifications to text.
Yahoo
16-05-2025
- Business
- Yahoo
Fridays Get Hectic as Traders Prep for Weekend News From Trump
(Bloomberg) -- Fridays used to be a slow day for Tony Trzcinka, a portfolio manager at Impax Asset Management, but now it's the busiest time of the week. As Coastline Erodes, One California City Considers 'Retreat Now' How a Highway Became San Francisco's Newest Park Power-Hungry Data Centers Are Warming Homes in the Nordics Maryland's Credit Rating Gets Downgraded as Governor Blames Trump NYC Commuters Brace for Chaos as NJ Transit Rail Strike Looms What used to be a day for thinking about long-term trends has turned into a critical time to prepare portfolios for the kind of market moving news that President Donald Trump has made a habit of delivering over the weekend. Demand for Friday portfolio tweaks has been enough to make trading high-grade corporate bonds on Friday 31% more expensive than it is the rest of the week, according to analysis from Barclays Plc. 'We've definitely noticed more activity in the market on Fridays,' said Impax's Trzcinka, who oversees around $3 billion in assets. 'You don't know what's coming on the weekend.' The situation is a reversal of the trend in recent years, when Friday was the cheapest day of the week to buy and sell bonds. In March and April, the last trading day of the week accounted for 18% of weekly investment-grade corporate bond volume, up from 16% in 2023 and 2024, Barclays analysts Zornitsa Todorova and Andrea Diaz Lafuente wrote in a report. Their analysis focused on the total notional value of investment grade bonds changing hands each day. The increased tempo on Friday is part of a broader jump in activity across the markets since Trump re-entered the White House and disrupted the economic outlook with his often unexpected policy decisions on tariffs, immigration and foreign affairs. The average number of shares traded in the equity markets each week is up 37% in 2025 from what it was in the four previous years, while equity trading on Friday has jumped 42%, according to analysis done by Bloomberg Intelligence analyst Athanasios Psarofagis. The reasons for this jump were on display last weekend. On Friday, Trump said that he might be willing to lower the tariff rate on China to 80%. Then, early Monday morning, the situation changed dramatically when Treasury Secretary Scott Bessent announced a pause on many tariffs aimed at China and a reset in the trade negotiations between the two countries. The S&P 500 jumped 3.3%, the Nasdaq 100 Index pushed back into a bull market, and credit markets signaled a steep drop in investor fears about defaults. Mark Clegg, a senior fixed income trader at Allspring Global Investments in Milwaukee, said that Bessent's moves were only the latest lesson in the importance of de-risking portfolios before the weekend. 'No one want to be a tad too long or short versus their target and come in on a Monday morning to try to correct things after a massive market shift,' said Clegg. Clegg said he uses Fridays to 'shed any excess risk.' For Trzcinka, the preparations have involved selling credit and buying Treasuries, or migrating to higher-quality bonds to manage risk. In the corporate bond markets, the weekly trading patterns have also been changed by the rise of electronic trading and portfolio trading, which have made it easier to quickly buy or sell a whole basket of bonds. 'Everything has become a bit faster,' Todorova at Barclays said. 'Because things are faster, investors can afford to do this on a Friday because they have certainty that they would be able to execute.' The increased speed and volume, however, hasn't made the trading cheaper, especially for the asset managers who, in recent weeks, have been in a rush as the weekend approaches. 'Portfolio managers are forced to sell what they can, not what they want,' said David Schiffman, a portfolio manager at Cantor Fitzgerald Asset Management, adding that he is often on the lookout for relative bargains on Friday. 'The lack of direction and certainty on an almost daily basis is close to the most extreme levels I have seen in my career,' said Schiffman. Cartoon Network's Last Gasp DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race Why Obesity Drugs Are Getting Cheaper — and Also More Expensive As Nuclear Power Makes a Comeback, South Korea Emerges a Winner Trump Has Already Ruined Christmas ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
