Breaking News Back in the black: Royal Bank of Scotland reported its first profitable first-half in the past three years. The bank, which is still 71% owned by the U.K. government, reported a 14% increase in revenue and a net profit of £939 million, versus a £2.05 billion loss in the first half of last year. Wall Street Journal, Financial Times
Wall Street Journal Job refinement: The Federal Reserve proposed reducing the requirements it places on banks’ boards of directors, “its latest move to recalibrate regulations as it takes stock of rules adopted since the financial crisis.”
“After talking with bankers and reviewing its policies for supervising bank directors, [the Fed] determined that it has been overloading boards with too many specific requirements, making it difficult for them to focus on big-picture strategy and risk management,” the paper reports.
Approved: The Senate approved several senior Treasury official nominees on Thursday, including the department’s top financial diplomat and the head of the unit that deals with bank regulation. David Malpass was approved as undersecretary for international affairs, where he will be the “administration’s key advocate for dealing with sensitive issues such as exchange rates and cross-border rifts over financial regulation, including at the G-7 and G-20,” the paper says. Christopher Campbell, who was approved as assistant secretary for financial institutions, will “play a critical role coordinating and advancing the administration’s regulatory agenda, including easing or rolling back provisions of the 2010 Dodd-Frank law, as well as its plans for a major rewrite of the U.S. tax code.”
David Malpass, Chief Economist, Bear Stearns & Co.a dinner meeting of The Economic Club of New York on Monday, October 15, 2007. Photographer: Daniel Barry/Bloomberg News
DANIEL BARRY/BLOOMBERG NEWS
Big support: SoftBank’s $93 billion Vision Fund is investing $250 million in Kabbage, the online small-business lending platform. Robert Frohwein, Kabbage’s CEO, said the investment marks “a material increase in the share price.” Two years ago, the company was valued at $1 billion, the paper notes.
Softbank is also a “significant” investor in consumer lender Social Finance, which Thursday posted record earnings and loan volume for its second quarter and said it is moving closer to going public. The company originated over $3.1 billion in student loans, personal loans and mortgages during the quarter. In addition to more positive comments about an IPO, CEO Mike Cagney told investors that he was “optimistic” that SoFi’s application to create a Utah bank would be approved “expeditiously” by regulators.
Prospering: In yet another deal in the sector, Prosper Marketplace said it is in talks to sell a 10% stake to executives of Linca Industrial (Fujian) Group, a Chinese conglomerate, for about $50 million, which would put a valuation of about $550 million on Prosper.
Big bet: Deals are also happening in the payments space. Blackstone Group and CVC Capital Partners said they have reached a deal to acquire British online-payments processor Paysafe Group for £2.96 billion ($3.89 billion). The private equity investors “are betting that the growing use among businesses and consumers of mobile devices to transfer money will drive demand for secure online-payment services.”
Square deal: Square reported a 41% increase in second quarter adjusted revenue, as more merchants signed up for its mobile credit card reading devices. It also said it made $318 million of business loans to customers during the quarter, up 68% from a year earlier.
Quotable “The sense is not at all to lighten the workload of directors or make their life easier. Our expectations are very high. It is an attempt to get them out of the weeds and put them focusing on the big issues.” — Federal Reserve Governor Jerome Powell on the central bank’s action to refine bank director’s job responsibilities.
At a time of mild or nonexistent loan growth, middle-market borrowers in the Lone Star State are providing a boost to Fifth Third Bancorp and Huntington Bancshares.
New details have emerged about the negotiations that culminated in Capital One's blockbuster $35 billion agreement to acquire Discover. At one point last December, the two parties broke off discussions, according to a securities filing.
According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.
The Alabama regional lender says it expects expenses to taper off this year and anticipates challenged loans will gradually rise to historically average levels.
Truist Financial's top executive leadership team announces departures; First Horizon's chief credit officer is retiring; Ferry teams with Highnote to roll out a new Visa-branded payroll card; and more in the weekly banking news roundup.
The Dallas-based regional bank tapped a client for its co-pilot capabilities, where employees can message a bot instead of a human to get tech assistance.
