Breaking News This Morning ...
Earnings: 4th quarter earnings from SunTrust Banks, Citizens Financial Group.
Wall Street Journal
Digital Asset Holdings just wrapped up a $50 million capital raise from a group of 13 investors that includes JPMorgan Chase, Citigroup, BNP Paribas and Accenture. The Blythe Masters-led company may announce more funding from additional banks in the coming weeks, unnamed sources told the Wall Street Journal. Read American Banker's story on the $50 million investment here.
OpenDoor Labs in San Francisco has developed a business of buying homes online for cash, flipping the homes and booking a profit. OpenDoor uses its own proprietary data-crunching formulas to predict the exact price at which to buy and resell. The Journal points out OpenDoor's business plan carries more risk than the garden-variety Silicon Valley pitch sheet, in which the business only plays the role of matchmaker. OpenDoor actually owns the assets involved in its transactions. OpenDoor's founder said the company is "introducing liquidity to a marketplace that doesn't have any."
Venture capital investments in fintech companies slowed in the fourth quarter, though the levels still remain high by historical standards. The decline coincided with the poor stock performance of LendingClub, OnDeck Capital and Square. The $21.6 billion invested in fintech companies in 2015 was the largest amount since 2000, the paper said.
Blackstone Group has capitalized on the heightened regulatory pressure placed on banks by acquiring businesses banks can no longer afford to keep themselves. The loot Blackstone snapped up includes General Electric's real estate business and $6 billion worth of what the paper calls "risky buyout loans" from Citigroup. Blackstone "didn't create the financial crisis and the regulatory pressure on the banks, but they've been at the forefront of taking advantage of it," a JPM Group analyst said.
Other private equity titans have done the same thing as Blackstone, with Apollo Global Management, for example, buying nonperforming loans. Private equity firms aren't burdened by the same regulatory constraints and thus can own some of these assets without incurring the same costs as banks.
After posting a staggering 38% year-over-year decline in earnings, and forecasting more bleakness this year, American Express CEO Kenneth Chenault promised to take drastic action. That includes $1 billion of cost cuts, which will affect "every area of business," Chenault said.
New York Gov. Andrew Cuomo nominated Maria Vullo, an attorney in the state attorney general's office, to lead the Department of Financial Services, the state's banking regulator. If confirmed, Vullo would succeed Benjamin Lawsky. Vullo has a background in business litigation and investigations.
Take the weekend off. We mean it. Unless you've got a deal you're working on. That's the message from JPMorgan Chase to its young investment bankers, as part of an effort to cut down on early burnout.
New York Times
Jamie Dimon is set to receive a 35% pay raise for last year's work as chairman and CEO of JPMorgan. Dimon received $27 million, one week after the company reported fourth-quarter earnings. Much of that pay is tied to the bank's performance.
Elsewhere ...
The Oklahoman: Randy Peterson, president and chief executive of the $93 million-asset Bank of Eufaula, was shot and killed on Thursday during an attempted robbery, the paper said. The suspect, Cedric Lamont Norris, entered the bank's North Main Street branch in Eufaula, Okla., on Thursday morning wearing a woman's hat and speaking in a woman's voice. He pulled out a gun, walked into Peterson's office and shot him in the stomach. He then allegedly shot and wounded another bank employee; she underwent surgery and is expected to survive. Norris then took another person hostage, and that hostage was injured in Norris' shootout with authorities.
Norris was later shot to death by law enforcement. Robert Simpson, the bank's owner, went into Peterson's office and found him slumped over. "I've seen people die, but I've never seen a more horrific way to die than what I saw today," Simpson said. "He was a great man. I just don't know what I'm going to do without him."
Norris had numerous felony convictions for robbery and other crimes in Texas and Oklahoma, the paper said.
