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Our high story right now appears at how income at Goldman Sachs, Morgan Stanley and a clutch of different western banks in China fell sharply final 12 months, as Covid-19 lockdowns and geopolitical tensions thwarted hopes that their operations within the nation may lastly begin to be profitable.
Credit score Suisse, Deutsche Financial institution, Goldman Sachs and HSBC reported losses of their China-based items in 2022 and Morgan Stanley’s income fell, figures revealed by the lenders and seen by the Monetary Occasions present.
Amongst a gaggle of seven Wall Avenue and European teams with funding banking items in mainland China, JPMorgan and UBS have been the one banks whose income rose, although HSBC’s unit misplaced much less cash than in earlier years.
The western banks have spent years investing in small and infrequently lossmaking operations in China within the hope {that a} foothold on the earth’s second-largest financial system would finally show worthwhile. However as relations between Washington and Beijing deteriorate, the figures present how tough that guess has develop into.
Listed below are two different reads on China I like to recommend:
And right here’s what else I’m watching right now:
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JPMorgan Chase: The Wall Avenue financial institution holds its investor day in New York.
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Nato: The navy alliance’s spring parliament session concludes with Ukraine defence minister Oleksii Reznikov because of converse.
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EU-South Korea summit: European Fee president Ursula von der Leyen and European Council president Charles Michel meet South Korean president Yoon Suk Yeol to mark 60 years of diplomatic relations.
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Outcomes: Large Yellow, Ryanair, Wincanton and Zoom Communications report.
Who will win the US-China tech warfare? Be part of FT and Nikkei Asia journalists for a subscriber-exclusive webinar on Might 25 and put your inquiries to the panel.
5 extra high tales
1. Unique: Credit score Suisse workers are making ready to sue the Swiss monetary regulator Finma over $400mn of bonuses that have been cancelled following the government-orchestrated takeover by UBS, which worn out the financial institution’s further tier 1 bonds. Hundreds of senior bankers have a portion of their bonuses linked to the securities.
2. The chair of a UK parliamentary committee has backed requires an audit into Teesworks, the flagship government-backed regeneration scheme overseen by the Conservative celebration’s most high-profile mayor, Ben Houchen, after an FT investigation raised considerations concerning the undertaking. Learn extra from Labour MP Dame Meg Hillier’s letter to the FT.
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Extra UK politics: The Labour celebration has urged Prime Minister Rishi Sunak to launch an ethics probe into claims that house secretary Suella Braverman requested civil servants to assist her keep away from penalty factors on her driving licence for dashing.
3. Unique: The EU is planning extra joint purchases of hydrogen and important uncooked supplies after its first try at aggregated fuel purchases was oversubscribed. Demand from patrons matched greater than 80 per cent of the bloc’s year-end goal.
4. London’s Allen & Overy is planning to merge with New York’s Shearman & Sterling to type a legislation apply with mixed revenues of about $3.4bn in one of many greatest transatlantic authorized tie-ups in historical past. Learn extra concerning the “magic circle” agency’s bid to overcome the US market.
5. Volodymyr Zelenskyy upstaged the G7 summit and garnered help for Kyiv’s plans to finish the warfare. The timing of the Ukrainian president’s arrival in Japan additionally offered a uncommon likelihood to ambush Brazil and India, which have each maintained ties with Moscow.
The Large Learn
A category of chemical substances often called PFAS (per- and polyfluoroalkyl substances) is vital to the manufacturing of the whole lot from smartphones to firefighters’ fits — however particularly to microchips. Nevertheless, these “endlessly chemical substances” so instrumental to chipmakers and the event of the world’s data-led financial system even have the potential for vital well being and environmental impacts.
We’re additionally studying . . .
Chart of the day
The Financial institution of England expects official figures on Wednesday to point out a big drop within the headline inflation fee, which the central financial institution hopes will persuade firms to assume twice earlier than rising costs or agreeing beneficiant wage settlements.
Take a break from the information
British writer Martin Amis died aged 73 at his Florida house on Friday. Dubbed “the erstwhile Mick Jagger of British letters”, his best-known works satirised the excesses of Margaret Thatcher’s Britain and explored the crimes of Lenin and Stalin. Learn the FT’s obituary of one among Britain’s most well-known novelists.
Extra contributions by Vita Dadoo Lomeli
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