Receiving Wide Coverage ... Not good enough: JPMorgan Chase had its biggest quarterly profit ever, Citigroup announced its “best investment banking performance in seven years,” and Wells Fargo reported its first increase in profits in seven quarters. Yet bank stocks tanked on Friday. “I’m not sure what people wanted. They all beat expectations,” Christopher Wheeler, an analyst at Atlantic Equities, told the Financial Times.
So what happened?
“The cautious reaction is a sign, in part, of how much expectations for the sector have risen since Donald Trump’s election last November spurred hopes of a more bank-friendly environment,” the FT offered.
The Wall Street Journal blamed a “still-challenging environment around lending and interest rates, along with frustration over Washington gridlock,” which could jeopardize tax reform and infrastructure spending. Investors are also worried “economic growth might not be strong enough to fuel further gains in bank shares given their postelection run-up.”
The New York Times agreed. “Without more help from the nation’s capital, it’s hard to justify the three banks’ healthy valuations,” it said. “Unless trading and lending suddenly pick up, the best ways for banks to meet their shareholders’ expectations are out of their hands.”
Trimming down: Wells Fargo is planning to sell off more non-core businesses to try to “restore investor confidence” following last year’s phony accounts scandal. “We get a little bit smaller, a little bit less complex and we can focus on what we’re good at,” John Shrewsberry, the bank’s CFO, told the FT. “There are a handful of businesses in our mindset,” he said, although he didn’t specify which ones might be for sale. Financial Times, American Banker
The scandal is indeed still weighing on the bank. More than 500 securities brokers have left Wells since the scandal, “a level of attrition that outstrips the pace at the other three big brokerages,” the Journal said. Although the bank “has largely played down the scandal’s impact on its brokerage arm,” blaming part of the attrition on brokers retiring, some of those who have left tell a different story.
Tim Sloan, president and chief executive officer of Wells Fargo & Co., speaks during a Bloomberg Television interview in San Francisco, California, U.S., on Tuesday, May 23, 2017. Sloan, who has been working to contain the fallout from a fake-accounts scandal since taking over as chief executive officer in October, said he was impressed with how Moynihan dealt with a raft of legal issues arising from the financial crisis during his first years as head of Bank of America. Photographer: David Paul Morris/Bloomberg
David Paul Morris/Bloomberg
“I was getting sick of people thinking I worked at the bank. It was a big hindrance to us and our growth,” said Dustin Granger, who left Wells in March to launch his own firm.
Wall Street Journal Raising the bar: Citigroup is sweetening the rewards on its Prestige credit card but also making it a little harder to get. The bank is expected to announce Monday it is raising the sign-up bonus on the card to 75,000 points from 40,000, but is increasing the minimum amount cardholders must spend in the first three months to get the reward to $7,500 from $4,000. The changes are to take effect July 23. The card carries a $450 annual fee.
Quotable “It’s almost an embarrassment being an American citizen travelling around the world and listening to the stupid sh** we have to deal with in this country.” — JPMorgan Chase CEO Jamie Dimon on Washington gridlock.
Backed by tech billionaires, the crypto-focused digital startup bank's timely application reflects the current administration's openness to new tech-driven banking models — and raises concerns about regulatory impartiality, considering its backers' political ties.
The application follows on the heels of Circle and Wise, as crypto and payment companies seek crypto custody approval and direct access to the Federal Reserve payment system.
The credit union regulator, responding to a recent executive order, has established strict new standards for prosecuting financial crimes. Regulators are now supposed to make criminal referrals only in cases where putative defendants appear to have known they were breaking the law.
Three bank trade associations recommended phasing out paper checks to reduce government payment fraud in a joint statement submitted to the U.S. Treasury.
Baton Rouge-based Investar Holding Corp. has agreed to pay $84 million for Wichita Falls Bancshares, which operates five branches in the Dallas-Fort Worth Metroplex.
