Receiving Wide Coverage ...
Shopping spree: Hackers stole debit and credit card information on about five million customers of the Saks Fifth Avenue and Lord & Taylor department store chains. Hudson’s Bay Co., which owns both chains, confirmed the thefts. Wall Street Journal, New York Times, Washington Post
Deutsche doings: John Thain, the former CEO of the New York Stock Exchange, Merrill Lynch and CIT Group, "is expected to join" the board of Deutsche Bank next month, along with three other people. Thain “would be a high-profile addition to Deutsche Bank’s supervisory board at a trying time for the lender,” the Wall Street Journal notes. Last week it was reported that Deutsche’s chairman Paul Achleitner has started looking to replace CEO John Cryan following three straight full-year losses.
“The pressure on Deutsche is intensifying ahead of what looks likely to be a fiery annual meeting in May,” the Financial Times adds. “The relationship between the affable Austrian, who has chaired Germany’s largest lender since 2012, and the dry-humored Mr. Cryan, installed as a turnaround chief executive, was never easy. But since late 2017, it has become increasingly fraught, according to several people familiar with the inner workings of Deutsche.”
Wall Street Journal
Big settlement: Barclays agreed to pay $2 billion to settle charges by the U.S. Justice Department that it fraudulently sold more than $30 billion of mortgage securities between 2005 and 2007 in the run-up to the global financial crisis. The British bank “systematically and intentionally misrepresented key characteristics of the loans,” the DOJ charged, which caused investors “enormous losses.” Two former bank executives agreed to pay $2 million in civil penalties to settle charges against them.
Crashing: The first quarter was not a good one for the cybercurrency market, with the total value of the sector falling 56% to $263 billion. Bitcoin lost about half of its value, ending the quarter at about $7,115, down more than 64% from its record high of $19,800 set on December 17. But other cryptocurrencies did as badly or worse, with Ethereum falling 46% and Ripple down 78%.
Home financing: Open Door Labs, which buys and resells houses, is looking to raise $200 million to finance its expansion. The new money would increase the company’s valuation to about $2 billion.
Under siege: Technology companies are poised to take more than a third of revenues from traditional banks over the next several years, according to Citigroup’s “Bank of the Future” report, with banks in the U.S. and Canada “more profoundly disrupted than elsewhere in the world.” The only area that is expected to remain relatively safe from competitors is credit card lending, although fintechs are expected to grab a 17% share of that market by 2025.
Relatively low pay may be a reason why banks are at a competitive disadvantage against tech firms, American Banker reports.
“Most of the disruption is still to come. There is lots of opportunity for market share shifts in those 10 years [through 2025] (and) existential risks for incumbents that don’t keep up.” — Ronit Ghose, head of global banks research at Citigroup, about the market share banks stand to lose from fintech competitors.