Western Europe

It seems difficult to convince investors that higher bank profits are sustainable.

As Europe’s economic mood sours, a sharp rise in interest rates is putting commercial real estate through its first big cyclical turn since 2008. The non-bank sector, which has become a vital enabler of funding at higher leverage, now faces a test of its resilience.

First Abu Dhabi Bank looked long and hard at Standard Chartered, and others will do the same so long as it’s cheap. But any suitor must win the approval of Temasek.

The European Commission has mandated instant payments across the eurozone, and banks must urgently ensure that their payment systems are fit for purpose.

The ECB is barely half way through raising rates. Quantitative tightening will further raise the cost of debt in 2023, and is set to test bond market capacity.

AT1s rallied on news that UBS will redeem a key deal in January. But with refinancing costs higher than coupon re-sets, the pressure now passes to other big banks.

The UK government has launched a sprawling range of measures to reform the country’s financial sector and markets. But the moves were mostly already under way – it is really all about the optics.

While there are some entertaining items – one country banning meat, the UK voting to UnBrexit – Saxo sees recession failing to halt inflation with the world economy on a war footing.

On December 1, EU member states agreed on a general approach for the Corporate Sustainability Due Diligence Directive. The final text shields banks from their full responsibility to prevent environmental harm, thanks in part to France’s post-Brexit ambitions.

As a long recession looms for the UK, past successes may be a sign of future problems.

Concerns about the wider economy and its impact on disposable income have eroded individuals’ appetite for FX trading, despite attractive levels of volatility.

While other economic blocs aren’t so convinced of the merits of issuing retail central bank digital currency, the eurozone is ploughing ahead. In doing so, however, it is having to water down the project to such an extent that its usefulness will be limited.

Shareholders will be keenly watching two market levels for Credit Suisse shares in the weeks ahead: the theoretical ex-rights price and the subscription price for the capital increase that is under way.

Societe Generale and AllianceBernstein may look like an equities odd couple. Leveraging Societe Generale’s derivatives franchise is key to the new joint venture, as is maintaining AllianceBernstein’s reputation for independence.

Credit Suisse directors may sigh with relief that shareholders have approved the latest capital raise, but they are already guiding to yet another big loss.

Most governments would have been delighted to do what Iceland managed with its sale of Íslandsbanki shares earlier this year. But an audit of the deal has triggered a war of words with the body responsible for it, as well as some very odd conclusions from an Excel spreadsheet.

After 12 years of near continuous restructuring and capital raising at Credit Suisse, the longest-serving chief financial officer of any G-Sib bank offers a few parting lessons.

Euromoney meets Damian Payiatakis, Barclays Private Bank’s head of sustainable and impact investing, to talk about how quiet private wealth has been so far at the UN Climate Change Conference.

NatWest digital SME bank Mettle has broken new ground in its partnership with Polish fintech firm Vodeno.

HSBC’s outgoing CFO, Ewen Stevenson, has mounted a robust case for the bank’s cost performance in an intriguing call with analysts that also featured an appearance by his replacement, Georges Elhedery. As he prepares to leave the bank, Stevenson defended his legacy by taking on the firm’s arch-critic, Ping An.

The German bank’s strong third-quarter earnings are a partial result of forming a new international private bank division two years ago, honing it and continuing to invest in the strategy.

Market experts fear that continued inflation and poor growth mean that many currencies are vulnerable to the pressure that the UK has seen recently.

European banks have raced far ahead of their US peers on sustainability. But the continent is now facing an energy emergency, creating pressure from some corners to reverse investment declines in oil and gas. Can Europe’s banks remain frontrunners in sustainable finance in today’s fragile geopolitical environment?

The biggest IPO in Europe for a decade has not generated the kind of excitement that might have been expected in calmer times. Porsche’s flotation was solid enough, but its structure and unusual nature make it a poor proxy for the broader equity capital markets business, which is on its knees.

Bankers are sending mixed messages about market strains. Dire warnings about year-end pressures, pleas for regulatory help and assurances that banks can sort this out are being deployed simultaneously.

The UK’s humiliation after bond investors rejected its mini-budget and sparked a liquidity crisis threatening the country’s pension funds holds two lessons for the rest of the global financial system. First, more markets will break down thanks to rising rates. Second, the battle everywhere between central banks fighting inflation and governments seeking to sustain economies and manage the cost of vast stocks of public debt will define finance for years to come.

Growthfund was formed six years ago as a steward for Greek state-owned enterprises in the hope of improving and extracting value from them. As chief executive Gregory Dimitriadis explains, its ambitions now include investment, emission reduction and enabling the flow of capital from the Middle East.

The weakness of the pound and strength of the dollar has implications for companies on both sides of the Atlantic.

Boutique investment bank DAI Magister suggests donor funds could catalyse private equity and debt investment in climate tech, the big theme of COP27.

UK pension fund hedges have failed the first real stress test in a new era of rising interest rates. Bankers are surprisingly relaxed about the implications for other threats to global systemic stability.