And then, there was one: In its continuing series on the leading figures of the financial crisis, the Wall Street Journal spotlights then and current JPMorgan Chase CEO Jamie Dimon, who is "about to be the last man standing." Besides Lloyd Blankfein of Goldman Sachs, who is scheduled to retire at the end of next month, Dimon is the only person to have led one of the six largest American banks throughout the past 10 years.
Jamie Dimon, chief executive officer of JPMorgan Chase & Co., poses for a photograph following a Bloomberg Television interview in Paris, France, on Thursday, March 9, 2017. Dimon said President Trumps economic agenda has ignited U.S. business and consumer confidence and he expects at least some of the administrations proposals to be enacted. Photographer: Christophe Morin/Bloomberg
Christophe Morin/Bloomberg
The careers of two of Dimon’s former lieutenants, Bill Winters and Jes Staley, “are now on a higher plane,” at least in terms of their jobs, as each runs a large U.K. bank — Standard Chartered and Barclays, respectively. “In terms of their pay packages, though, things have got significantly worse. In fact, their pay has tanked: falling by more than two-thirds” since they left Chase in 2007.
Separately, JPM said cardless access has now been rolled out to nearly all of its 16,000 ATMs in the U.S. “The new technology will allow customers to get cash through their phone’s mobile wallet without needing a physical debit card or an access code for authentication.”
Earnings: HSBC’s second quarter profit rose 5.6% as expenses climbed 7%. Wall Street Journal, Financial Times here and here
Meanwhile, HSBC is “pushing back” against investor complaints about its recent decision to reclassify £2 billion of legacy capital instruments as tier 2 capital. Securities known as discount perpetual securities provide banks “with cheap or convenient access to funding at a time when regulators have promised to clean up lenders’ capital structures to make rescues easier to arrange in a crisis.” The dispute has “raised questions over whether they should still count towards lenders’ regulatory requirements.”
Wall Street Journal
We’re back: Following a second quarter decline of 2.5%, their worst performance in two years, big bank stocks “are booming again after a string of strong earnings reports and higher payouts to shareholders re-established their status as some of the stock market’s most appealing investments. ... This quarter, those big banks are again outperforming their smaller, regional brethren, a sign that their massive scale offers the potential for more lucrative returns.”
Two heads are better than one: Goldman Sachs is planning to name Jim Esposito as global co-head of its securities trading division, “ending months of leadership uncertainty in its largest and most challenged division.” He will work alongside Ashok Varadhan, who has been a co-head of the unit since 2014.
The good old days: “In the old days, Citi not only didn’t fall victim to business cycles or financial crises, it thrived when others faltered,” according to an op-ed by James Freeman, an assistant editorial page editor at the paper, and Vern McKinley, a visiting scholar at the George Washington University Law School. “It became a banking giant because it had the strength to seize opportunities — and new customers — in periods of panic. The bank was in many ways healthier and more stable during the century when it was independent than during its century of support from the federal government.”
Financial Times
Shake it up: AIG CEO Brian Duperreault said he is working with “a sense of urgency” following another disappointing earnings report in the second quarter, “the latest sign of how his efforts are taking time to ripple through to AIG’s bottom line” after “years of underperformance.” One of his first moves is a shakeup in his management team.
Tough task: Deutsche Bank’s treasurer is warning that weaning the global banking system off the discredited Libor rate could be “bigger than Brexit.”
“I think it is a mammoth exercise with a lot of risk,” Dixit Joshi said. “It is not insurmountable but it is complicated. In many ways this is potentially bigger than Brexit.”
Pushing back: Bank lobbyists want to “neutralize” what the paper calls “the biggest change to U.S. financial bookkeeping in a generation” that would force banks to recognize loan losses earlier. The change takes effect for listed banks in less than 18 months.
Go USA!: Deutsche Bank is looking to “grow, grow, grow” its American wealth management division, and will boost its number of account managers there by 25%.
Quotable
“When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give, and older Americans turn to what little is left of the social safety net — bankruptcy court.” — A study by the Consumer Bankruptcy Project, which found that the bankruptcy filing rate among people 65 and older has tripled since 1991.
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.
The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
