Whiff of animal spirits in the air on Wall Street
by: Alistair Gray in New York and Martin Arnold in London
For a few hours this week it looked like the biggest bank in the US was heading into a bidding war of the kind not seen since the pre-crisis boom years. Worldpay, the UK payments processor listed on the FTSE 100, disclosed that JPMorgan Chase had made a takeover approach in what would have been the largest acquisition since 2009 by a “big six” US bank. Karen Petrou, managing partner at Federal Financial Analytics, a Washington-based consultancy, says the industry’s stress test success last week “gives the big banks more ammunition. It could be fired at opportunities such as acquisitions of fee-based businesses, and pushing at the edges of non-traditional activity.” She remains cautious, however. “The US banking industry is frisky but not yet animal.” Regulators are not the only constituency executives need to win over. Shareholders remain jittery about banks after the 2008 meltdown. “Look at Bank of America and Citigroup — they are much better than they were, but they are not fully cured,” says Nancy Bush, analyst at NAB Research. “Their strategies are still in transition.” Wells Fargo, meanwhile, is trying to get over a scandal about fake customer accounts that erupted last year.