Financials; Key Lessons From This Week

What have we learnt from the financials this week?

• Regulatory issues persist. Press reporting StanChart involved in Iran sanctions-busting, Citigroup subject to more Fed monitoring, Raiffeisen is (positively) in talks to sell Belarusian business (having announced deal to exit Russia in Dec-23), HSBC & BNP offices in South Korea were raided (illegal stock short-selling, allegedly).
• Commercial real estate continues to be the key credit stress point. PBB/DePfa credit has dropped in price this week (some decent-sized lines trading in the 80s). The Swedish regulator warned of such risks in its economy, too.
• Primary has kicked back in as we move through results season (BPER, BNP) and Raiffeisen similarly on the back of its better recent newsflow.
• Strategy revisits coming with results; StanChart reported to be looking at “revamp” of its inv bank, Barclays expected to showcase full review next week, too.
• Buybacks galore; ABN posted reasonable results (certainly better than ING) but the equity is up over 10% on a EUR500m buyback. Commerzbank results were relatively good (esp. for a German-exposed issuer), having already announced a buyback on 9-Jan. NatWest announced GBP300m today.
• UK asset retail asset quality looks solid and the revenue outlook as rate tailwinds reverse is not much weaker than feared (per NatWest results).