Daily Brief – European banks

European banks

With more of a whimper than a fanfare, on Thursday evening the ECB cleared UniCredit to increase its direct equity stake in Commerzbank with no upper limit from below 30% which, together with its derivative contracts means that by the end of the year that bastion of the German mittelstand or midmarket will have fallen to UniCredit. Before Deutsche Bank (market cap USD 50B) was cut down or size in the wake of the Global Financial Crisis, its then leader called for a “European banking champion” to challenge the might of Wall Street’s universal banking titans. HSBC with a market cap of USD 300B followed by Santander at USD 180B are both mostly commercial banks while next largest, UBS at USD 150B has nailed its colours to the mast of wealth management. The largest of the European banks that looks most like a universal bank is Barclays at number 9 in Europe at USD 80B. Contrast that with the largest US universal banks: JPMorgan Chase USD 900B, Bank of America USD 360B, Wells Fargo USD 250B and Citibank USD 210B. Big is not necessarily beautiful but the question is now being asked as to whether the new UniCredit Group of USD 175B will prompt a further round of mega European banking mergers.

GBP/USD 1.3327.

Bhutan and its Bitcoin

When I visited the Himalayan Kingdom in 2025, the two topics of conversation with politicians and business leaders centered around Bhutan harnessing its powerful roaring mountain rivers to generate hydroelectricity and using that power to mine Bitcoin. At its high point, Bhutan had mined 13,000 Bitcoin which at a price of USD 81K meant that its holding was worth just over USD1 billion. This is where it gets murky: the registered holdings of Bhutan’s Bitcoin as at June 2026 was just 1750 worth USD 142 million. The question is what has happened to the bulk of Bhutan’s coin. Possibilities include outright sales, transfers to non-Bhutan accounts, pledges against borrowings and transfers to crypto exchanges. Just to add one further layer of mystery, Bhutan disputes that its holding of Bitcoin has actually reduced at all and states that it does not recall selling any of its holding. If ever this area of the financial markets should raise questions with investors, then Bhutan is a case study in point.

GBP/EUR 1.1858.

Brain dump

Smart phone users who have decided to go the final mile and ditch any pretence of using their brains, read on. Amazon unveiled two devices at the end of last week which link to and record information on users’ smartphones such as calendar invitations, lists of to do’s and conversations that need follow ups through the use of AI insights. The Frontier costs USD 75 and is a bracelet while the Eclipse is shaped like a brick and costs USD 100. These devices will obviate the need to remember, think or indeed manage one’s time.

Brent Oil USD 109.86.

Bangkok

With the markets’ eyes and ears attuned to any nuances from the finance ministers at the IMF’s annual meeting in Bangkok at the end of last week, there was precious little to sift through in the way of the runes let alone the tealeaves. The Fed’s Chair Warsh is sticking to his mantra of giving little away and saying less and settled for a statement saying that the world had broadly conformed to expectations. EUR steadied on Friday and clawed back a little versus USD.

EUR/USD 1.1239.

Send in the Clowns

This day in 1977 Judy Collins sang her version of this song by Stephen Sondheim. Already released and showing only average sales, it was singing it this day in 1977 on an episode of the hit show The Muppets that ensured that it took off and was the key track on her album Judith.

Isn’t it rich?
Are we a pair?
Me here at last on the ground
You in mid-air
Where are the clowns
Isn’t it bliss?
Don’t you approve?
One who keeps tearing around
One who can’t move
Where are the clowns?
There ought to be clowns
Just when I’d stopped
Opening doors
Finally knowing the one that I wanted was yours
Making my entrance again
With my usual flair
Sure of my lines
No one is there

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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