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B of A's Moynihan Gets a Raise; HSBC Gets Out of Panama

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Receiving Wide Coverage ...

Moynihan's Big Payday: Brian Moynihan got a big raise in 2012. According to a regulatory filing (and one person "familiar with the matter" who was kind enough to fill in some gaps), the Bank of America CEO's overall pay package totaled $12 million. This includes a $950,000 salary and $11.1 million in restricted shares, which, together represent a 70% increase over his pay in 2011 and the "largest since he took over the Charlotte, N.C., company in 2010." The raise is related to "an improved performance" last year as B of A's shares advanced 109% and net profit jumped by 189%. If you're wondering where Moynihan, "the lowest-paid chief executive among the six giant U.S. banks and securities firms" in 2011, now falls on the executive pay scale, the raise puts him ahead of JPMorgan Chase's Jamie Dimon — who, recall, got Whaled in 2012 — and Morgan Stanley's James Gorman, who also took a pay cut this year. He will still make less, however, than Goldman Sachs' Lloyd Blankfein and Wells Fargo's John Stumpf. Financial Times, Wall Street Journal

Out of Panama: HSBC is selling its Panama subsidiary — the aptly named HSBC Panama — to Bancolombia, Colombia's largest bank by assets, for $2.1 billion. According to Dealbook, the subsidiary's net asset value is estimated to be $700 million. The sale, subject to regulatory approval, is expected to close in the third quarter of 2013. The deal is part of HSBC's ongoing efforts to downsize sprawling global operations to increase profits. (See: the recent sale of its stake in China's Ping An Insurance.) However, the FT's Lombard column notes that, while the sale "prosaically" is related to the unit not making any money, it should help to keep HSBC, which recently agreed to pay $1.92 billion to settle U.S. money laundering probes in places such as Mexico, "honest." Says the author Jonathan Guthrie: "The moral relativism that traditionally infects multinationals in hot, corrupt countries is going out of style."

Wall Street Journal

Statistics show banks, "loaded with liquidity and starving for growth," are making business loans again. But already, there are concerns that the pendulum will swing too far in the other direction. "When competition for loans increases, that shows itself in thinner pricing and eventually in loan structures that are weaker than what they had been," one analyst tells the paper.

Financial Times

Len Blavatnik, a billionaire investor who is suing "arrogant" JPMorgan Chase (his words, not ours) to reclaim $100 million lost through allegedly negligent investments JPM made during the financial crisis dropped this choice quote about the bank: "If the government sues them they settle immediately and it could be billions. If it's individuals or small corporations they litigate you to death and who can take them on?" JPMorgan's response to the suit: ""In no way did we fail to live up to our responsibilities. However, we are sorry that Mr. Blavatnik feels that he had a bad experience."

Lloyds' payment protection insurance woes continue. The Financial Services Authority has fined the bank £4.3 million for delays in compensating customers who were "mis-sold" the product.

New York Times

Prepaid debit card provider NetSpend has been sold to global payment provider TSYS for $1.4 billion.

This Dealbook op-ed asserts that a report prepared by a JPMorgan Chase board review committee regarding the bank's $6 billion Whale loss teaches many valuable lessons about corporate governance. "This was clearly not a case where the board was asleep at the wheel," the author notes. "Rather, the JPMorgan analysis suggested that if the board members had received the information fully and promptly, they would have been able to better exercise their oversight responsibility."

Washington Post

The paper asks "Is the Banking System Healthy?" after noticing that bank stocks are still not trading at pre-crisis levels, despite the fact that figures show banks are making a comeback. The conclusion seems to be that banks are, in fact, doing better when it comes to capital and liquidity, but investors appear cautious of regulatory risk related to the implementation of Dodd-Frank and the "sea of litigation" in which the nation's largest banks remain engulfed.

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(Image: Bloomberg News)

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