Homecoming: Bank of America announced plans to open its first branches in Ohio’s three major metropolitan areas: Cincinnati, Cleveland and Columbus. “The move is a part of the bank’s consumer unit’s years-long expansion into big U.S. cities where it previously had no branches,” the paper says. The first branches in Ohio, CEO Brian Moynihan’s home state, are expected to open in the fourth quarter.
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Brian Moynihan, chief executive officer of Bank of America Corp., looks on during a Bloomberg Television interview at the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 17, 2017. World leaders, influential executives, bankers and policy makers attend the 47th annual meeting of the World Economic Forum in Davos from Jan. 17 - 20. Photographer: Simon Dawson/Bloomberg
Simon Dawson/Bloomberg
Happy trails: MetLife said the executive in charge of the unit that failed to pay 13,500 retirees their pension benefits is leaving the company this week. The insurer said EVP Robin Lenna, head of MetLife’s Retirement & Income Solutions unit, which oversees its pension-risk-transfer business, will retire on March 1 after 14 years with the company. The internal memo announcing her retirement doesn’t attribute her departure to the pension mistake, which forced MetLife to increase reserves and delay the release of its 2017 fourth quarter earnings report.
Hard to pin down: SoftBank founder Masayoshi Son draws the attention of the paper, which interviewed his business associates and investment partners to try to figure out his investment logic, which “appears sometimes methodical, sometimes haphazard.” His most recent investment is a large minority stake in Swiss Re.
“They describe a man who sometimes makes gut-instinct decisions in businesses he knows little about — such as the time he spent about 30 minutes deciding he wanted to invest $200 million in a startup that grows vegetables indoors. Other times, he compiles an elaborate analysis, inundating his directors with hundreds of pages of documents to help explain an investment target.”
Financial Times
Not as radical as it looks: The U.S. Treasury’s proposal to have failing banks file for protection under a new Chapter 14 bankruptcy regime “has no more than an outside chance of being enacted by the current Congress,” Patrick Jenkins, the paper’s financial editor, says in an opinion piece. “But even if some of the reforms pass, [President] Trump’s deregulatory push looks rather more incremental than his fake slash-and-burn rhetoric.”
A little help: Credit card lenders in the U.K. will have to waive fees and interest charges for customers mired in persistent debt, meaning those whose payments are smaller than interest and fee charges. The rules by the Financial Conduct Authority take effect in September.
“These new rules will significantly reduce the numbers of customers with problem credit card debt,” said Christopher Woolard, the FCA’s executive director of strategy and competition. “Under these new rules firms will have to help customers to break the cycle of persistent debt and ensure customers who cannot afford to repay more quickly, are given help.”
Hiring again: Europe’s top four investment banks — Credit Suisse, Deutsche Bank, UBS and Barclays — added employees last year for the first time since 2015 “to capitalize on improving market conditions after years of restructuring,” the paper reports. “The increase suggests the tide is turning for Europe’s top investment banks, which cut about 12,000 jobs in 2016.”
Be bold: The U.K. “is ideally placed to take advantage of the dramatic growth of digital currencies and should embrace them the same way we embraced the Eurodollar market in the early 1960s,” says Pierre Lagrange, co-founder of Man GLG, a London-based investment manager, in an op-ed piece. Lagrange, who believes “that cryptocurrencies and blockchain are here to stay and will become the backbone of global transactions,” says Britain “has perhaps the most sophisticated financial regulators in the world. Why should they not take the lead in shaping the regulatory future of digital currencies? In a post-Brexit environment, this is just the kind of outward-reaching step the U.K. should be taking.”
Quotable
“We all thought the unicorn stuff was going to start slowing down. Then along comes SoftBank and lobs another $90 billion into what many people thought was already an overheated market.” — Tim Connors, founder of PivotNorth Capital, a Silicon Valley venture capital firm.
Two former members of the Federal Open Market Committee said in interviews that they expect the Federal Reserve to keep rates steady amid uncertainty over the ongoing war with Iran and the resulting upward pressure on inflation.
Goldman Sachs Chief Legal Officer Kathryn Ruemmler received an 11% pay hike last year, bringing her total compensation to $25 million; U.S. Bank promoted Toby Clements to chief operations officer; Klarna is expanding its forward-flow and whole-loan sale deal with Elliot Investment Management to $2 billion; and more in this week's banking news roundup.
Carter Bankshares in Martinsville, Va., sold more than $200 million of loans made to companies controlled by Sen. Jim Justice and his family, closing out a once close relationship that later descended into rancor and litigation.
The Federal Deposit Insurance Corp.'s Office of Inspector General said in a Thursday report that staffing cuts over the past year could strain supervision and the agency's response to a crisis.
The latest rise in property tax collections at the end of last year continued a nine-quarter streak of increases, according to the National Association of Home Builders.
