United States

US banks this week reported stellar returns from trading and underwriting in the first quarter, even as the bottom line was hit by gigantic writedowns and reserves for credit losses, as the economic and financial disruption from the coronavirus crisis took its toll.

Banks have been building their financial sponsor coverage teams on a record period of deal making. Now they have a different fight on their hands, but bankers are playing down the threat of a 2008-style meltdown, writes David Rothnie.

GSX Techedu, a Chinese kindergarten to 12th grade after-school tutoring platform, has been targeted by a US short-seller for allegedly inflating its revenue. The company has denied the allegations.

US banks ramped up reserves for credit losses, expanded credit lines and enjoyed bumper trading and debt underwriting volumes in the first quarter, according to results released on Tuesday and Wednesday.

HSBC has overhauled the structure of its global banking business for the second time in as many years in a push to cut costs and bring its commercial and investment banking divisions closer together.

A large positive move in stock prices in the past three weeks has buoyed many market commentators, but equities bankers and investors are concerned that equity valuations still do not reflect the severity of the economic effects of the Covid-19 pandemic. If first quarter results or a worsening of the virus are bad enough to drive markets lower still, sufficient harm could be done to investor sentiment to slam shut a vital issuance window for companies desperate to raise cash.

US-listed AMTD International floated on the Singapore Exchange this week, debuting dual-class shares on the southeast Asian bourse through a secondary offering.

Yankee bank and insurance names took centre stage in the dollar market as US banks prepared to give their first insight into the impact of the coronavirus with the arrival of bank earnings season.

High grade companies stormed the dollar bond market again this week, as asset prices stabilised, helped by White House health adviser Dr Anthony Fauci raising hopes that the US could soon turn the tide in the battle against Covid-19.

Luckin Coffee seemed too good to be true. It was.

A group of banks that worked on Luckin Coffee’s IPO is facing questions after an alleged multi-billion renminbi fraud came to light last week. But some of the limelight has already been drawn away by another possible fraud case in China and a controversial short report, creating wider uncertainty around US-listed Chinese stocks. Jonathan Breen and Rebecca Feng report.

'We are all in this together' is not a view Europe’s investment banks will recognise when they compare themselves with their formidable US rivals, writes David Rothnie.