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JohannesBorgen Profile picture
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18 May, 5 tweets, 1 min read
*SCOR RISES 3.8% AFTER CEO STEPS DOWN

This story is bananas. Let me recap.

After years of fighting, Kessler, long time Chairman & CEO finally accepts to follow "good practices" and split the two roles.

Kessler looks around and finds the perfect CEO candidate, "French style" :
Benoit Ribadeau-Dumas, admin supreme court judge, former member of the PM's staff under Chirac and former chief of staff of Edouard Phillipe.

All is well in the country of France
He is to take the position in 2022, after Kessler steps down as CEO and some "training" (he's never been in the insurance business before).

But Kaboum
Kessler decides that for personal reasons he wants to step down from his CEO position this year. Well, let's have BRD earlier then ?

Hmm... not so fast. The board decides he isn't "trained" enough and "the conditions are not met" for him to be COE. OUCH !! That's not very nice.
And now the board proposes Laurent Rousseau, who's been at Score for 11 years.

Let's see what happens next year, it should be fun !

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More from @jeuasommenulle

JohannesBorgen Profile picture
18 May
Maybe I'm late here, but I've just realised why Tesla wants to allow crypto payments (Bitcoin or other) and it's definitely NOT because they want to jump on the crypto bandwagon.

Here's the crucial bit in the terms and conditions

1/2
So what you're doing here, is give them a free option on the Crypto. With a basic assumption of 3-month delivery time and the 70% vol we have on #bitcoin, this is worth around 13.5 of the price you pay 🤣

When deliveries are driven by efficient option exercise, it'll be fun.
13.5% obv
Read 4 tweets
JohannesBorgen Profile picture
15 May
Not sure if this of any use to any1 but that tweet raises a question: why is a bank safe? Here's my (very simple) take, by order of importance.
1. Because it makes money from clients - always the most important thing.
2. Because it has diversified businesses (country/product)
3. Because it has enough capital in case 1. is temporarily not true. (Shock absorber - but won't work if 1. is structurally not true)

4. Because it has access to capital : equity (1. needs to be true for investors to have appetite) and debt (with the CB just in case)
5. Because it understands its risks and has a strong compliance (this is slowly moving upwards in the hierarchy !) Risks can be high or low, it doesn't really matter if you understand and price them properly.
Read 5 tweets
JohannesBorgen Profile picture
14 May
#CreditSuisse International published its annual report which contains this useful information on #Archegos:
3 lessons:
1) Addt'l 600m loss in Q2
2) Still 3% exposure!
3) Thanks to the banking surcharge, UK taxpayer providing a "tax shield" of 1.3bn$ (maybe more with new budget)
Also interesting to notice that CSI didn't book the full DTA (54% by my quick calc), suggesting they won't pay any tax in the UK for more than a decade.
Final important point: 0 loss in the US, 0 loss in Switzerland, so the PRA might be the one who takes a close look at the operations and risk management.
Read 4 tweets
JohannesBorgen Profile picture
7 May
There's something really weird going on with Monte Paschi's Q1 results.
i) they booked a massive gain on BTP
ii) they changed real estate valuation to fair value to increase equity
iii) they delayed the impact of TRIM
As a consequence they don't have a capital shortfall 1/2
But the capital shortfall is going to appear soon, in 2022. Why is this weird? Because we have the EBA stress test results in Q4. It almost looks like they're engineering a 'no shortfall' situation ahead of the stress test in order to have one in the stress test. 2/3
Why would they do that? Well, state aid/BRRD rules are not the same if the shortfall comes from the stress test...

Call me a cynic but this is odd.

3/3
(yes the numbering was off, as always)
Read 4 tweets
JohannesBorgen Profile picture
29 Apr
Who wants another thread about the absurdity of risk management in the financial sector?

(The crowd goes wild, it’s #RiskManagementMonth #Archegos)
There is a crucial concept in risk management: a group of companies.

Because they are strongly connected, the risk of those companies is similar and highly correlated.

So you want to know if companies belong to the same group.
This is precisely the crucial topic that explains (in part) the bankruptcy of Greensill and the criminal proceedings against its German bank @BondHack & @cynthiao have been talking about:

Was the “Friends of Gupta” a group or not?
Read 13 tweets
JohannesBorgen Profile picture
29 Apr
A smart analyst at Autonomous has spotted something weird in the Archegos disclosure by Credit Suisse.

Bear with me for the hunt for the missing billion.
Pre tax the bank lost -757m ow -4430m on Archegos so 3673m ex Archegos.

Pre Archegos the tax rate guidance was 26%, so a tax of -955m on the pre Archegos profit before tax.
The CFO said they took only 650m of tax shield on Archegos because the loss was so big that the relevant legal tax entities (in US & UK) could not absorb the loss with future profitability
Read 5 tweets

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