Federal Reserve gives U.S. banks a thumbs-up as all 23 lenders easily pass 2021 stress test [CNBC]
Following the passage of this latest exam, the industry will regain a measure of autonomy it lost since the last crisis…. Under something called the stress capital buffer framework, banks will gain flexibility in how they want to dole out dividends and buybacks.…
“So long as they stay above that stress capital buffer requirement and all their other requirements every quarter, a bank can technically do whatever it chooses to do with regards to buybacks and dividends,” Jefferies bank analyst Ken Usdin told CNBC this week.
Credit Suisse’s SPAC Bonanza Dries Up [WSJ]
Credit Suisse went from making an estimated $466 million in gross SPAC underwriting fees in the first quarter, to $16.1 million between April 1 and June 15, according to data provider Refinitiv…. The SPAC business is emblematic of the bank’s post-Archegos dilemma: It wants to ratchet down risk and focus on managing the wealth of the global rich—but investment banking brought in 40% of revenue last year….
The SPAC fee surge last year helped Credit Suisse offset $1.3 billion in unexpected charges from a legal case, and revaluing a hedge-fund stake. The revenue took on more importance when Archegos Capital, the family office of hedge-fund manager Bill Hwang, couldn’t meet margin calls at several banks in March, causing more than $10 billion in losses at lenders exiting the Archegos positions.
Credit Suisse said it was able to largely contain losses from Archegos because of the strong quarter it had elsewhere in the investment bank, including in underwriting SPACs and other IPOs.
Ackman’s un-SPAC elicits a shrug from investors [Reuters Breakingviews]
The vehicle traded at an average premium of 27% to its cash, unusually for a SPAC, between its September float and when Ackman unveiled the Vivendi deal. Deduct the Universal distribution and the remaining cash from its $23 share price and there’s roughly $3 per share left. That implies a reduced 12% premium to net asset value across both a follow-on PSTH deal and a future SPARC transaction. Substitute a higher value for Universal, which JPMorgan reckons could be worth almost $60 billion, and PSTH's share price implies no Ackman magic at all.
Didi Sets Valuation Target of $62 Billion to $67 Billion in IPO [WSJ]
The fully diluted valuation, which typically includes restricted stock units, could eclipse $70 billion…. Didi is looking to raise $3.9 billion in the initial public offering by selling 288 million American depositary shares, assuming they price at the midpoint of its targeted range of $13 to $14 per ADS, the filing said.
Ousting Toshiba Chairman, Foreign Investors Score Breakthrough in Japan [NYT]
The ouster of the chairman, Osamu Nagayama, 74, followed an investigation that revealed that top Toshiba executives had worked with the Japanese government to inappropriately pressure investors who sought to shake up the company’s management…. While shareholder interventions in business management have long been common in other wealthy countries like the United States, foreign activist investors suffered defeat after defeat in skirmishes with corporate Japan through the 2000s.
Plain spoken hedge fund manager stands by 33 year-old son [efinancialcareers]
Winston Marshall, the 33 year-old son of Paul Marshall, the 61 year-old co-founder and chairman of hedge fund Marshall Wace…. explained that he was resigning from [Mumford & Sons] following a social media furore over his support for a book written by American journalist Andy Ngo that accuses antifascist group Antifa of seeking to destroy democracy. "The only way forward for me is to leave the band. I hope in distancing myself from them I am able to speak my mind without them suffering the consequences," wrote Marshall./His father has leapt to his defence on Twitter.