Good as Goldman: Goldman Sachs reported better-than-expected fourth quarter earnings and revenue. The bank earned $2.35 billion, or $5.08 a share, up from $4.68 a share in the year earlier quarter, excluding a $5 billion settlement with the Justice Department, which reduced earnings to $1.27 a share. Revenue grew to $8.17 billion from $7.27 billion.
Citi reports: Citigroup reported higher earnings but lower revenue. Profit rose to $3.57 billion, up from $3.34 billion a year earlier; revenue fell $17.01 billion, down from $18.46 billion.
Receiving Wide Coverage ...
Good show: Morgan Stanley reported a profit of $1.67 billion, or 81 cents a share, in last year's fourth quarter, its best fourth-quarter results since the financial crisis. That's up from $908 million, or 39 cents a share, in the year earlier period. Revenue rose 17% to $9.02 billion, helped by a 167% jump in bond trading revenue to $1.5 billion. For the full year, net income fell 2.4% while revenue slipped 1.5%. Wall Street Journal, New York Times
Despite the good news, chairman and CEO James Gorman's comments about the quarterly results "were shot through with caution," the Financial Times noted. He said Morgan Stanley intended to remain "extremely disciplined," especially when it came to watching expenses. Wall Street Journal, Financial Times
Steven Mnuchin, Treasury secretary nominee for president-elect Donald Trump, sits while meeting with Senate Majority Leader Mitch McConnell, a Republican from Kentucky, not pictured, at the U.S. Capitol in Washington, D.C., U.S., on Tuesday, Dec. 6, 2016. Mnuchin has avoided specifying whether hell maintain his predecessors stance regarding the greenback. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
Inside job?: When the Senate considers Treasury Secretary-designate Steven Mnuchin's nomination on Thursday, Democrats are likely to focus on his acquisition of the failed IndyMac Bank (now OneWest), where – fairly or unfairly – he earned in their eyes the sobriquet "the foreclosure king." But his acquisition of First Federal Bank of California has been relatively overlooked, "even though it was a big reason for OneWest's eventual success," the Journal reports.
"It shows an executive willing to push outside normal channels," including informing federal banking regulators "about his strong interest in First Federal" even before the bank failed, the Journal says. The acquisition allowed Mnuchin and his management team "to double the size of their branch network and move into higher-end areas of Southern California, accelerating OneWest's shift toward catering to high-income clients and commercial loans."
Separately, a group of protestors numbering in the "dozens," according to the Financial Times, demonstrated outside Goldman's New York headquarters on Tuesday, protesting President-elect Trump's appointment of so many former Goldman bankers – including Mnuchin – to his incoming administration.
Wall Street Journal
Smooth transition: Richard Davis is stepping down as CEO of U.S. Bancorp after 10 years in the position. "Despite the tough conditions [following the financial crisis] and Mr. Davis's reluctance to fire employees to cut costs, U.S. Bank remained more profitable and efficient than its peers thanks to a diversified approach that includes a lucrative payments business," the Journal said. He will be succeeded by president and chief operating officer Andrew Cecere at the bank's annual shareholder meeting in April.
Leaving: Alan Cohen is leaving his post as Goldman Sachs' head of compliance after 13 years. He will become a senior adviser to the firm's executive office and will be replaced by Sarah Smith, the bank's chief accounting officer. Cohen is one of the few people who was hired by Goldman as a partner rather than having to work his way up the ranks. Prior to Goldman, he ran the white-collar crime and regulatory practice group at O'Melveny & Myers and, before that, was a federal prosecutor where he dealt with securities and commodities fraud.
That's settled: Deutsche Bank completed its $7.2 billion settlement with the U.S. Justice Department over claims that it misled investors about toxic mortgage securities it sold before the global financial crisis. The German bank admitted it made "false representations" to the investors and omitted material information in disclosures. The settlement includes a $3.1 billion civil penalty and $4.1 billion in help to struggling borrowers.
Quotable ...
"This is so seamless. I hate to say it, but you might not even notice I'm gone." – U.S. Bank CEO Richard Davis on his decision to step down in favor of president and COO Andrew Cecere
New York's attorney general announces MoneyGram will pay a civil fine to settle a lawsuit over its handling of remittance payments; Swedish buy now/pay later lender Klarna is getting into the telecom business; Truist Financial has hired Charles Alston to lead its new nonprofit hospital, higher education and government banking team; and more in this week's banking news roundup.
Lipkin, who built Valley National Bancorp from a small community bank into a regional institution with 200 branches in four states, passed away this week at age 84.
Financial markets were shaken but not stirred this past spring, according to the Federal Reserve, as swinging stock prices and bond yields did little to bring down elevated asset prices or leverage.
