HSBC plans global banking overhaul; Merkel to sit out merger talks

Receiving Wide Coverage ...

What’s wrong with Wells?
The market isn't buying Wells Fargo CEO Tim Sloan's claims that the bank's problems are fixed, according to Ben McLannahan, the Financial Times’ U.S. banking editor.

In this podcast, American Banker reporter Neil Haggerty examines the political implications of Sloan's testimony to the House Financial Services Committee last week.

Wall Street Journal

Good run
Raymond James Financial CFO Jeff Julien, “America’s longest-serving finance chief, is stepping down.” Julien joined the firm in 1983 before becoming CFO in 1987. “Jeff has had an extraordinary career, serving over 32 years as Raymond James’ CFO, during which time we have enjoyed 124 consecutive quarters of profitability,” Chairman and CEO Paul Reilly said.

Financial Times

On alert
Barclays Chairman John McFarlane warned the bank’s directors against granting a board seat to activist investor Edward Bramson, claiming that his “presence on the board would be detrimental to the company and shareholders as a whole.” Were Bramson to be successful in enacting his wish to reduce Barclays’ investment banking activities, it would force the bank into a “prolonged round of review and/or restructuring at a time when focus should remain on successful execution,” McFarlane said. The bank’s annual meeting is in May.

Sorry about that
A group that gave Metro Bank a £120 million award for “capability and innovation” last month cautioned the bank about providing misleading business plan information following the disclosure of major accounting errors in its business loan portfolio. Banking Competition Remedies awarded the prize a week before Metro made the disclosure, which forced it to reduce its growth plans and to issue £350 million in new equity. The bank “assured BCR the mistake would not affect its bid for a share of the funds, which were being paid for by Royal Bank of Scotland as a condition of its bailout in the financial crisis.”

Look who’s talking
The possible Deutsche Bank-Commerzbank merger, Fidelity National Information Services' $43 billion acquisition of Worldpay, and Goldman Sachs’ effort to increase the number of women in senior management are discussed in the paper’s Banking Weekly podcast. Andrea Enria, the chair of the European Central Bank's Single Supervisory Mechanism, discusses the ECB’s take on the creation of “national banking champions.”

Soon forgotten
Future “financial crises are inevitable," says Martin Wolf, the paper’s chief economics commentator. "As time passes, regulation degrades and risks rise. These decisions may not endanger the stability of the financial system. But they show that financial regulation is procyclical: it is loosened when it should be tightened and tightened when it should be loosened. We do, in fact, learn from history — and then we forget.”

New York Times

Hands off
German Chancellor Angela Merkel said she doesn’t plan to get involved in the merger talks between the country’s two biggest banks, Deutsche Bank and Commerzbank, and urged her government “not to interfere” in the discussions. Although the government owns a 15% stake in Commerzbank, which it acquired as part of a bailout during the financial crisis, she said that was too small to justify getting involved in the talks.

Jason Alden/Bloomberg

Elsewhere

Trying to catch up
Following another year of “underwhelming performance,” HSBC is “plotting a push to recover ground lost to rivals, with a revamp of its trading floor seen as top priority.” As part of “a root-and-branch overhaul of its global banking and markets division,” the bank named 83 new managing directors “in a 1,300-strong promotions spree aimed at revitalizing its investment banking franchise.”

Separately, HSBC group chief operating officer Andy Maguire tells CNBC that banks and fintechs both benefit by working together. “HSBC can help start-ups to understand the ‘real problems,’ better, while the bank gets pushed along to be less bureaucratic.”

Quotable

“I personally am waiting for what the players, the economic players, tell me, and I am not taking a stand.” — German Chancellor Angela Merkel on the ongoing merger talks between Deutsche Bank and Commerzbank.