Receiving Wide Coverage ...
HSBC Earnings: HSBC's first quarter earnings almost doubled year over year, with pre-tax profit rising to $8.4 billion compared with $4.3 billion during the same period in 2012. The increase is attributed largely to all that cost-cutting the bank has been doing and a decline in bad debts. Expect the cost-cutting efforts to continue. Per the FT, "the bank is expected to close or sell a further eight to 10 businesses this year and next, in addition to the 49 already divested since 2011." Wall Street Journal, New York Times
Schneiderman's Threat to Sue: New York Attorney General Eric Schneiderman Mondaythreatened to sue Bank of America and Wells Fargo over alleged violations of last year's $25 billion national mortgage settlement. The prospective lawsuits, which primarily concern alleged violations of the servicing standards and timeline outlined by the settlement, could be filed against the banks within two months. However, according to Reuters, "it is unclear how far Schneiderman can take his efforts, because they come outside the primary channel authorized by the settlement for any potential violations." The terms of the settlement require states to give notice of violations to the settlement's monitoring committee. The committee has 21 days to decide whether to take action. If it chooses not to, the state may file a lawsuit 21 days after that determination. Schneiderman said he gave official notice on Friday. The settlement also stipulates banks be allowed to fix flaws before legal action can be taken. (This requirement is reflected in the statements issued by both banks regarding Schneiderman's announcement. Wells Fargo is "committed to full compliance," while B of A "will work quickly to address" problems.) These requirements aren't dissuading Schneiderman from action. "We're going to start with these two [banks]," Schneiderman said during a press conference yesterday, indicating "potential action" against JPMorgan Chase, Ally Financial and Citigroup, the other three servicers involved in the settlement, hasn't been ruled out just yet, reports the Journal. Several news outlets, including American Banker, are reporting other states may follow Schneiderman's lead in taking action against Wells and B of A. Financial Times, New York Times
B of A, MBIA Settle: "After years of battling," Bank of America and bond insurer MBIA have settled their differences over soured mortgage securities. The terms of their settlement stipulate the bank pay MBIA $1.6 billion in cash and lend it another $500 million. "In return, [B of A] gets stock-purchase warrants that could give it a stake of 4.9% in MBIA," the Journal explains. The deal, believed to benefit both parties, was facilitated by someone Scan readers should be well-acquainted with: New York superintendent of financial services Benjamin Lawsky. Washington Post, American Banker
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