Bank faces backlash on Tubman card; HSBC to cut costs, workers

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HSBC plans to cut 35,000 jobs and $100 billion in assets over the next three years, the Wall Street Journal says. The bank, which said it lost nearly $6 billion last year, also said it would suspend share buybacks for two years. The plan calls for scaling back its operations in the U.S. and mainland Europe while focusing more on Asia and the Middle East.

The plan, which calls for $4.5 billion in cost cuts, is HSBC’s “most drastic overhaul since the financial crisis in a bid to kick-start its stuttering business,” the Financial Times says.

The bank “faces headwinds that include the coronavirus outbreak in China and months of political strife in Hong Kong, one of its most important bases.”

Retirement plans

The desire of some millennials to retire early and their low inflation expectations “could leave central bankers with less room to cut interest rates, which they have long done to boost growth in times of economic trouble,” the New York Times says. “To leave the work force early, millennials would need to build up massive retirement funds and consume less in the process. That hit to demand could slow growth and force rates to drop ever lower to entice spending. And if today’s workers actually managed to retire young, it would exacerbate the situation by shrinking the labor force, further weighing on the economy’s potential.”

At the same time, “their belief that costs will not increase could eventually slow actual price gains by making it hard for businesses to charge more. The Fed’s main interest rate includes inflation, so that would leave it with even less room to cut.”

Millennials are indeed aggressively saving for retirement, the Washington Post reports. They “contributed $373 million to IRAs in the fourth quarter, a 46% increase over the total amount contributed for the same period in 2018. The average balance for millennials is $32,700, up from $29,400 [the previous] quarter and $24,200 a year ago. Going back to Q4 2009, the average balance for millennials was $7,300.”

Wall Street Journal

Lender beware

A growing number of auto dealerships are being accused of “kicking the trade,” encouraging customers to buy a new car then have their lender repossess their current ride. “When dealerships kick the trade, they typically get a lender to approve a loan for the buyer’s new vehicle,” the paper explains. “Next, the buyer generally goes home with two vehicles and two loans. It is only then the buyer asks the original lender to repossess the original car.”

“Lenders generally say they will cut ties with dealerships that do this. Often, though, the lenders aren’t aware it is happening.”

Dealerships do this because they make more by arranging financing than by selling vehicles, the paper says, plus there's no risk. "If a car loan goes bad, it typically isn’t the dealership on the hook — it is the borrower or lender."

New name, new policies

Royal Bank of Scotland is not only planning to change its name but is also changing its lending policies regarding fossil fuels. The government-owned U.K. bank, which is rebranding itself as NatWest later this year, “said it would end coal financing by 2030 and stop lending and underwriting companies with more than 15% of their activities related to coal by the end of 2021, unless they have a transition plan in line with the Paris Agreement. It also pledged to halt lending to and underwriting major oil-and-gas producers without a transition plan by 2021.”

“British banks are under pressure from environmentalists and investors to move their financing away from fossil fuels.”

Financial Times


Deutsche Bank “is facing a rash of contractor departures in vital compliance areas such as anti-money laundering after angering its freelance workforce by demanding they take a 25% pay cut in response to a change in U.K. tax law. The contractors are upset by changes made to the bank’s hiring policy on freelancers ahead of reforms to the U.K.’s off-payroll tax rules, which have been designed to boost receipts by cracking down on ‘disguised employment.’”


Intesa Sanpaolo, Italy’s biggest domestic bank, has launched a takeover bid for UBI Banca, the country’s fourth biggest lender, “in an audacious attempt to kick-start consolidation in Italy's fragmented banking sector. If successful, the combination would create the seventh-largest bank in the eurozone with €1.1 trillion in assets.”

New York Times

Wrong image?

OneUnited, the nation’s largest black-owned bank, has “found itself the target of jokes and jabs” after it launched a debit card featuring the likeness of the abolitionist Harriet Tubman. “The backlash was almost instant, and it was difficult to pinpoint what offended people more,” the paper writes. “Was it her crossed arms that resembled the ‘Wakanda Forever’ salute from the movie ‘Black Panther’? Was it the combination of a gold chip above her right shoulder and the Visa logo on the left? Maybe it was the whole thing.”

Teri Williams, the bank’s president and CEO, defended the card, telling the paper, “This symbol of Black empowerment in 2020 will pave the way for the Harriet Tubman design on the $20 bill.” But some “social media users accused the bank of pandering, while others pointed out the disconnect of featuring a former slave on a monetary device like a debit card.”

Joining the crowd

Michael Bloomberg’s campaign plans to announce Tuesday morning its “proposals for changing how the financial industry is regulated,” many of which “wouldn’t be out of place for Senators Bernie Sanders and Elizabeth Warren” and mark a “reversal from Mr. Bloomberg’s previous stance on financial regulation.”

Among the proposals: Toughening the Volcker Rule and forcing banks to hold more in reserve against losses, merging Fannie Mae and Freddie Mac, and expanding the jurisdiction of the Consumer Financial Protection Bureau to include auto lending and credit reporting.


“It’s amazing how differently the idea of Harriet Tubman on U.S. legal tender feels than putting her face on a debit card.” — A comment on Twitter criticizing OneUnited’s use of Harriet Tubman’s likeness on a bank debit card

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