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Barclays Reports Loss; Will Sell Africa Unit: Barclays shares fell more than 9% Tuesday morning after it announced restructuring plans that include a gradual sell down of its 62.3% interest in its Africa unit and slashing its dividend payouts in half in 2016 and 2017. By cutting dividends the bank aims to build reserves so it can absorb losses as it sells off "non-core" assets, which now include Egyptian, Zimbabwean and Asian wealth businesses. Barclays, one of the most weakly capitalized in Europe, said both moves could help it boost its Tier 1 capital ratio at least a percentage point. As expected, CEO Jes Staley also announced plans to begin splitting its consumer and investment banks, which it is required to do by 2019.
Staley has emphasized the need to restore Barclays' reputation as a major banking institution, following the Libor rigging scandal and other regulatory investigations, by improving its overall conduct. He attacked former banker pay practice at the company – particularly bonuses "based on profits they expected to earn in the future and then it all came tumbling down" and implied they "lost their moral compass in the 1990s because of their single minded pursuit of their personal wealth." Staley plans to further cut the bank's bonus pool for senior executives (Barclays has already cut the bonus pool in half over four years), but said it remains important that employees be paid "competitively."
Citi to Sell China Guangfa Stake: Citibank is exiting its 20% stake in China Guangfa Bank to continue building its branch network in China, which employs 8,000 people across 13 cities. Citi will also focus on other partnerships, like its Shanghai-based investment banking venture and its partnership selling insurance products. Citi agreed to sell its interest for 19.68 billion yuan ($3 billion) to China Life Insurance Co., the country's largest life-insurance company by premiums. The sale, which has been in talks since October, is expected to close in the second half of 2016. Citi doesn't anticipate it will have material impact on its next earnings report, coming in April. Citigroup doesn't release its earnings in China, but a spokesman said its $1 billion-plus revenue in the country in 2015 was a double-digit percentage increase from 2014. Revenue is up from around $100 million 10 years ago.
Wall Street Journal
As banks anticipate judgments in the coming weeks from the Federal Reserve and Federal Deposit Insurance Corp. on their so-called "living wills," the question of
New York Times
A nonprofit watchdog is calling for an investigation of Mortgage Bankers Association CEO David H. Stevens for a
Small British banks will continue to be exempt from