Corporate Financier’s Notes by Aivars Jurcans
Done! And Done
Berkshire Hathaway, Warren Buffet’s investment vehicle, has sold off most of its stake in Goldman Sachs and has reduced its shareholding in JPMorgan Chase by 3%. Meanwhile, it has reported an increase in its shareholding in PNC Financial Services and Bank of America.
Deals On The Table
Sony is said to be planning to take full control of Sony Financial Holdings, its finance unit, in a transaction valued at about USD 3.7 billion. The Japan-focused unit is expected to help offset a wider operation vulnerable to global shocks.
MKB, a Hungarian bank, and Magyar Takarekszovetkezeti Bank (MTB), another Hungarian lender, are said to have agreed to establish a joint financial company, Magyar Bankholding. The combined entity would become the 2nd largest bank group in the country (after OTP Bank) with 1.3 million customers and 840 branches.
Goldman Sachs is said to be planning to buy Folio Financial, a boutique wealth management custodian and technology company, for an undisclosed amount. Folio has USD 11 billion in assets under custody for registered investment advisers.
Deutsche Bank is said to be weighing the sale of Norisbank, its German online bank. The Bonn-based Norisbank (which was acquired by Deutsche from DZ Bank in 2006 for EUR 420 million) is said to have 550,000 customers.
Banca Farmafactoring, an Italian specialised lender, is said to be planning to merge with DEPObank, its depositary bank. DEPObank which was created from a spin-off from NEXI, an Italian payments group, is focused on depository and settlement bank business.
Metrics To Watch
BNP Paribas and Societe Generale have been among the worst-hit big European financial stocks, both down more than 50% in 2020. BNP Paribas trades for 1/3 or its book value; Societe Generale for 15% of its book value. Big US banks trade closer to their book value or above.
Monzo, a UK digital bank, is said to be raising a new round of cash at an almost 40% of discount to its previous fundraising. Monzo plans to raise between GBP 70 million and GBP 80 million to “see it through the coronavirus disruption” at a valuation of around GBP 1.25 billion.
On The Baltic Shores
Swedbank, a Swedish lender, is said to be “exploring options” for its payment unit, including a potential sale.
“ebitdac” – earnings before interest, tax, depreciation, amortisation and coronavirus. The number is supposed to reflect profits the companies believe they would have made, were it not for virus-related lockdowns and disruptions to supply chains.
China is the 3rd largest fund management market in the world behind the US and UK with assets of USD 5.3 trillion, according to Morgan Stanley and Oliver Wyman; the pool of assets is forecast to grow to USD 9 trillion by 2023.
A Thought Worth Noting
“This crisis must serve as a wake-up call and a call to action for business and government to think, act and invest for the common good and confront the structural obstacles that have inhibited inclusive economic growth for years.”
Jamie Dimon, chief executive, JPMorgan Chase
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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.