Marcus product chief leaves; BBVA unveils loan tied to digital milestones

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Mixed signals
“Bitcoin aficionados who thought big Wall Street institutions were about to become heavy hitters in the cryptocurrency markets” are having to rethink that idea in the wake of last year’s crash in bitcoin.

But maybe it’s too early to throw in the towel. On Tuesday bitcoin prices briefly jumped more than 20% to more than $5,000, a four-month high, before dropping to near $4,700.

Wall Street Journal

Not close
“Despite recent moves from Congress and the Trump administration, housing finance reform remains a long way off,” the paper reports. “It is doubtful that the administration has enough time to formulate a plan and put it in place before election season kicks into high gear, making it risky to touch an issue as sensitive as housing.” Even if President Trump wins reelection, don’t expect any “decisive action” until 2021. “Should a Democrat prevail in 2020, it would be back to square one.”

Big banks' little deals
With investors "demanding growth," big Wall Street investment banks “are tripping over themselves, and sometimes each other, to win business advising smaller companies on deals — assignments they would have scoffed at a few years ago,” the paper says. Deals as small as $500 million, that would have fallen to regional banks in the past, are drawing big banks' attention. "While fees in the middle market are smaller, they are typically split between fewer banks. Deals also close faster and require fewer staff than complex, trans-Atlantic takeovers."

Financial Times

Jet lagged
Michael Cerda, the former head of media products at Facebook whose hiring two years ago as product chief for Goldman Sachs’ consumer bank Marcus “was heralded as a coup,” is leaving the bank. The paper says it confirmed a report that Cerda is tired of commuting between his job in New York and his family in Los Angeles. His early departure “highlights the challenges big banks face to attract and retain top tech talent.”

Let’s get digital
BBVA has developed a corporate loan whose interest rate declines as the borrower achieves “a set of digital business milestones.” The first “D-Loan,” as the Spanish bank calls it, was signed by a Singapore-based food company. The interest rate on the $350 million loan will decline if the company “hits a set of 32 digital targets,” including cyber security and other types of “digital innovation.” The deal is intended to show “how far [BBVA] is prepared to go to prove its digital credentials,” the paper says.

Ready to settle
Standard Chartered is close to reaching a deal with the U.S. Department of Justice to settle charges it violated American sanctions against dealing with Iran, the paper says. The British bank has set aside $900 million to cover potential fines in the U.S. and the U.K.

Sentenced
Two former Barclays employees have been sentenced to prison after being convicted of conspiring to rig the Euribor rate. Carlo Palombo, a former trader at the bank, was given four years in prison while Colin Bermingham, a senior rate submitter, got five years. Sisse Bohart, a junior submitter, was acquitted.

Elsewhere

A positive spin
Santander is expected to try to “reassure investors” at a strategy update on Wednesday following its botched attempt to hire former UBS banker Andrea Orcel as its CEO earlier this year. The Spanish bank “is likely to reinforce efficiency measures as part of its digital transformation to persuade investors that its latest profitability and capital targets can be maintained, analysts said.”

Quotable

“What we are increasingly seeing is that the more digitally advanced a business is, the better it performs, [not just] financially, but also in terms of key metrics like staff engagement, customer acquisition and reduced attrition.” — Ricardo Laiseca, head of global finance at BBVA, which has created a new type of loan that rewards the borrower for reaching digital business targets

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