Recovering: Deutsche Bank's first quarter profit more than doubled compared to the comparable period last year, bouncing back from a turbulent 2016. Wall Street Journal, Financial Times
Receiving Wide Coverage ...
Cashing in: Former President Barack Obama agreed to accept $400,000 to speak at a Cantor Fitzgerald health care conference later this year. The fee, according to the New York Times, "is a sharp increase from the amounts typically paid to his predecessors. Former President Bill Clinton averaged about $200,000 per speech while former President George W. Bush is reportedly paid $100,000 to $175,000 for each appearance." Financial Times, New York Times
Wall Street Journal
Not fans of Glass-Steagall: "Investment banking isn't risky. What's dangerous is creating stand-alone firms that can't diversify," William M. Isaac and Richard M. Kovacevich write in an op-ed.
Cashing out: While Obama is cashing in, top executives and directors at regional and community banks continue to cash out following the rally in bank stocks since the election. Insiders at these banks have sold about $1.4 billion in their companies' stock through the end of March, according to an analysis by the paper.
Donald Trump, 2016 Republican presidential nominee, speaks during a campaign rally in Hershey, Pennsylvania, U.S., on Friday, Nov. 4, 2016. As the U.S. presidential race heads into its final weekend, Trump is showing strength in Iowa and Ohio pre-Election Day voting, while Hillary Clintons advantage in early balloting looks stronger in North Carolina and Nevada. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
Short-term pain: President Trump's proposal to cut the corporate tax rate to 15% from 35% will hurt earnings at some big banks in the near term but they'll make up the difference very quickly. The lower tax rate would force banks like Citigroup and Bank of America to write the down the value of their deferred tax assets, which would be worth less in a lower tax environment. According to the paper, Citigroup had $46.7 billion of net deferred tax assets at the end of last year and B of A had $19.2 billion. However, after an initial hit, "they could potentially recoup the value of the write-downs in a year or two," the paper said.
Hands off: The Conference of State Bank Supervisors is suing the Office of the Comptroller of the Currency to block it from issuing specialty national banking licenses to financial technology firms. The group, which represents banking regulators from all 50 states, argues the OCC has the authority to license nonbanks that only take deposits.
Streamlined regulation: The Federal Reserve is restructuring its Large Institution Supervision Coordinating Committee, a panel it set up in 2010 to improve its supervision of the biggest and most complex banks. The changes look to reduce overlapping areas of responsibility and clarify the roles of supervisory staff. But "the pending changes amount to more than housekeeping," the paper says. "They are expected to influence how the Fed commissions examination work by its bank supervisors, as well as how they prioritize different work streams and who assesses their findings."
Big quarter: PayPal reported first quarter revenue rose 17% to nearly $3 billion and said it plans to repurchase as much as $5 billion of its own stock.
Rock solid: Did you know that you can buy shares in a central bank? Not only is stock in the Swiss National Bank super safe, but it's up more than 50% in the past year, partly owing to its limited number of outstanding shares. Adding in its small, fixed dividend, the stock is a "quirky though potentially enticing alternative to zero-yielding bank deposits or negative-yielding bonds."
Financial Times
Bah on Brexit: Three of Europe's biggest banks – Credit Suisse, Standard Chartered and Santander – all reported significant increases in earnings and comfortably beat analysts' expectations in the first quarter, overcoming worries about Brexit and the eurozone economy. "Buoyant emerging markets and a trading boom in the U.S. have helped," the paper notes.
New York Times
Time to go: "It's time to add Wells Fargo's chairman, Stephen W. Sanger, to the list of firings over the creation of millions of fake accounts," columnist Antony Currie says.
Elsewhere
Plastic, not paper: More than a third of Europeans and nearly 40% of Americans could go without cash and rely on electronic forms of payment, according to a survey conducted for eZonomics, an ING bank website. At least 20% of those surveyed say they pretty much go cashless already.
Quotable ...
"More and more people will end up with a situation where they can quite comfortably get by for two days, three days, four days, even a week, without ever using cash." – Ian Bright, managing director of group research for ING wholesale banking
Leaders of ORNL Federal Credit Union are piloting Zest AI's new artificial intelligence-powered assistant to ensure equitable underwriting practices and measure performance against similar institutions.
Powered by younger, affluent cardholders, American Express saw a 6% increase in billed business during the first quarter, while weak growth still plagues its small-business segment.
For the better part of the past decade, the Federal Reserve Board in Washington has played a more active role in presidential searches by regional reserve banks. The shift seems to have made the system more diverse, but some argue it's at the expense of regional bank independence.
The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
