Finance

Wells Fargo missed analysts’ expectations on first-quarter revenue and expenses as Chief Executive Charlie Scharf continues to face challenges turning around the bank after years of scandals.

Despite better-than-expected trading results, Citigroup reported a 46% decline in first-quarter earnings stemming largely from soaring noninterest costs and a $1.9 billion provision for souring loans tied to Russia.

CEO Jamie Dimon cited elevated risks related to inflation and the war in Ukraine as the nation’s largest bank added $902 million in loan-loss reserves. “Does this represent conservatism in an uncertain macro environment or something more onerous?” one analyst asked.

Mike Roffler, the San Francisco bank’s incoming chief executive, says he’s not shifting strategy. During the first quarter, the company leaned on its mortgage business, where customers moved to lock in refinancings before interest rates rose.

Celebrities on the investor roster include Ashton Kutcher, Justin Bieber, Steve Aoki and Gwyneth Paltrow. 

The loss was driven by “funding spread widening as well as credit-valuation adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from Russia-associated counterparties,” the company said. 

Circle Internet Financial, the issuer of USD Coin, the second-largest stablecoin, landed $400 million in funding from a group that includes BlackRock and Fidelity Management and Research, a sign of traditional finance’s growing acceptance of the exploding cryptocurrency industry.

Progressive groups once again are forcing shareholder votes in connection with hot-button issues such as racial equity and climate change. But now conservative groups are also harnessing the same process in an effort to influence the positions that banks take on politically charged issues.

Higher interest rates are generally helpful to the industry, but they are also leading to unrealized losses in banks’ bond portfolios. Trust banks such as Bank of New York Mellon, State Street and Northern Trust may take relatively large hits when they announce their first-quarter results.

In his annual letter to shareholders, the JPMorgan Chase CEO wrote that although the U.S. economy remains strong, “we should prepare for the potential negative outcomes.” He also provided more detail about the megabank’s big spending plans.

On Dec. 31, 2021. Dollars in thousands. (Dec. 31, 2021)

Increased interest income would boost banks’ lending profitability, but inflation and mounting expenses, along with the specter of potential recession, loom large.

Esther George, president of the Federal Reserve Bank of Kansas City, says changes in the office sector and monetary policy pose potential risks to property owners and their lenders.

JPMorgan Chase’s fledgling digital bank is going after more customers in the U.K. with a new savings account.

Federal Reserve Chair Jerome Powell said the central bank will take the “necessary steps” to get inflation down even if that means increasing interest rates more rapidly than currently anticipated and eventually to levels that slow the broader economy.

Ramp, a startup that offers corporate cards and other finance tools to businesses, raised $750 million in a funding round that valued the fintech at $8.1 billion.

The move away from the scandal-plagued London interbank offered rate is going smoothly, according to a new survey of lenders and corporate borrowers. But many customers still face operational challenges ahead of a mid-2023 deadline for switching older loans.

In response to the war in Ukraine, the custody bank is no longer pursuing new business in Russia. Citigroup, JPMorgan Chase and Goldman Sachs have all announced similar moves.

The Federal Reserve Board voted to lift the benchmark rate to target range of 0.25% to 0.5% and signaled more hikes at all six remaining meetings this year.

Gauntlet, a financial-risk modeling platform for crypto lending, raised a new round of funding that pushed its valuation to $1 billion.