How fast should an Asia-focused bank grow? There’s no right answer, but the long-term number probably ought to be higher than the 3% compound annual revenue increase that analysts are pencilling in for $200 billion HSBC between 2025 and 2027. New CEO Georges Elhedery announced a broadly sensible strategy for the lender on Wednesday, while implicitly acknowledging that the growth question is partly out of his hands. It makes a further valuation boost unlikely. The centrepiece of Elhedery’s announcement was a $1.5 billion annual cost-cut target by 2027, helped by closing bits of its U.S. and European investment bank. The move makes sense, but

Per Franzén is taking charge of EQT at a pivotal moment. The Swedish buyout shop is big, with about $140 billion of fee-paying assets under management, but it’s not in the same league as U.S. giants like Blackstone and KKR. The $40 billion company’s biggest gap lies in the racy world of private credit, which EQT quit several years ago. Franzén’s legacy might be defined by whether he manages to reverse that historic decision. The EQT veteran, who currently runs the firm’s main investing businesses in Europe and North America, will take over in May from boss of six years

Wall Street’s investment banking titans closed 2024 on a high. Goldman Sachs and Morgan Stanley will most likely announce strong revenue growth in full-year results due Tuesday and Wednesday respectively, as an M&A uptick kept their dealmakers busy. But there’s a hitch: bond-market chaos could slow everything down. Wracked by rising interest rates, a bleak 2022 sliced Goldman’s net earnings roughly in half year-over-year. The slide continued in 2023, and the recovery is only now showing. Analysts expect both Goldman CEO David Solomon and Morgan Stanley boss Ted Pick to turn in a roughly 12% year-over-year bump in net revenue for all of 2024,

The annual stress tests that banks undergo are supposed to soothe nerves. This year they’ll probably jangle them. The 31 large U.S. lenders put through their paces by the Federal Reserve sailed through, showing capital levels that remained sound even under theoretical spikes in unemployment, plunging real estate prices, and market routs. The near-$300 billion of capital they hold that’s surplus to the required amount must be burning a hole in their pockets. This year’s test resembled last year’s, but with some tweaks. Interest rates started higher and fell faster. Stock and bond prices declined more dramatically. In total, the banks,

Blackstone is grappling with a peculiar sort of funding mismatch. The investment shop managing more than $1 trillion says market ructions present acquisition and lending opportunities, but it is also selling less. Moreover, the growing likelihood that interest rates stay higher for longer threatens deal activity. If the dynamic persists, it will sharpen the divide between fund backers focused on profit and public shareholders benefiting from capital deployment. The firm led by Steve Schwarzman has accumulated an impressive war-chest. Even as the U.S. Federal Reserve made borrowing costs pricier, Blackstone kept raising cash to invest, surpassing $200 billion. It more than

Big banks benefit from higher interest rates. So the market’s assumption that stubbornly high consumer prices will delay rate cuts from the Federal Reserve is no bad thing for investors in JPMorgan, Wells Fargo and Citigroup. All three report first-quarter earnings on Friday, and are likely to say that shifting monetary policy is working in their favor. Smaller rivals, though, will struggle to turn inflationary lemons into lemonade. The bulk of mega-banks’ business is simple. They make money from interest on loans and securities, and they lose money on interest paid to depositors and other funding providers. The pocketed difference, dubbed net

Carlyle named a new boss; KKR embarked on a insurer-merger makeover; Apollo Global Management  touted its rise to debt-printing machine. The era of high interest rates choked off deals, cut into earnings, but saw a flowering of strategic shifts among buyout shops. The industry’s giants now all have a story to tell about why they’re on stronger footing. As the U.S. Federal Reserve loosens its stranglehold, the strategic mania should ease. But as they’re showing, buyouts still matter. Harvey Schwartz, now a year into the top job at Carlyle, on Wednesday unveiled turnaround targets, joining his major rivals in crystallizing a big-picture

Not even the mighty Blackstone can defy the economy. At present that’s a good thing. The $1 trillion asset manager broke a five-quarter run of declining earnings in the fourth quarter. Money deployed for deals and cash flowing into its funds also increased year-on-year after a similar-length dry spell. Boss Steve Schwarzman says 2023 was the industry’s nadir, which means what comes next is the bounceback. Everything is going as a Blackstone investor might hope – except for one precious piece of the puzzle. Like his peers, Schwarzman had a rough 2023. Private equity firms couldn’t easily find cheap credit to fund

Instead of emphasizing change, David Solomon is now touting consistency. The Goldman Sachs chief executive laid out a new way of thinking about revenue on Tuesday, alongside the Wall Street investment bank’s $1.9 billion in earnings for the fourth quarter. It’s a reasonable approach, but one where arch-rival Morgan Stanley is doing even better. When Solomon moved into the corner office five years ago, he set out to make Goldman’s earnings more predictable. Banking everyday customers, and not just the rich, was a big part of the strategy. It flopped, and the aftereffects are reflected in the $1.7 billion loss recorded in 2023

The hallowed Goldman Sachs partnership is an undeniable part of the Wall Street firm’s cachet. For more than 150 years, the elite club has helped attract top-notch financiers. It is also too much of a good thing. Goldman partners stopped being partners in the strictest, firm-owning sense when the U.S. investment bank went public in 1999. Their collective shareholding has fallen from about 60% to roughly 5%. Instead, the designation now describes about 420 senior employees who benefit from higher pay, exclusive investment opportunities and the expectation of being heard by top executives. Partners answer to David Solomon, Goldman’s CEO. But he

There is a spirited argument to be had about whether upcoming rules governing bank capital are fair or necessary. Yet the eight Wall Street chief executives who faced a U.S. Senate banking panel on Wednesday instead chose an ultimatum reminiscent of mobsters in 1920s movies: “Nice economy – it would be a shame if anything were to happen to it.” It’s an unhelpful way to get what they want. The bosses of JPMorgan, Goldman Sachs, Morgan Stanley, Bank of America and peers are united in their dislike of the global rules known as Basel 3. They argue that forcing big banks to hold

Carlyle’s new boss Harvey Schwartz spent 21 years as a rainmaker at Goldman Sachs. One way he could leave a lasting imprint on the private equity firm he now runs is by doing a transformational deal. The twist is, this wouldn’t be a swashbuckling raid on another company. The ex-banker should instead partner with the co-founders and a deep-pocketed investor and take his own $11 billion firm private. Schwartz took the top job in February after several years of Carlyle’s stock being a laggard. Like other private equity firms founded in the late 1980s, it was working through a leadership transition. But