Receiving Wide Coverage ...
To Bonus or Not to Bonus? For the second year in a row, Barclays CEO Antony Jenkins is turning down his cash bonus. Jenkins cited continuing restructuring and legal issues as the reason for his decision. He'll still receive a base salary of £1.1 million for the year. The Journal reports that Jenkins isn't alone in refusing a payout, citing Royal Bank of Scotland as another firm with executive bonus forfeitures. But other CEOs including Goldman Sachs' Lloyd Blankfein and, oh yeah, JPMorgan Chase's Jamie Dimon are getting big bonuses this year. The news of these payouts hasn't done much for banking's image (especially given the year Dimon had.) But the pay experts tell the FT, in reality, financial firms' compensation situation is more complex: "Banks will discriminate hugely by continuing to pay star traders large bonuses while cutting back ruthlessly among low-performers and more junior staff."
Libor Warning: The U.K.'s Financial Conduct Authority has signaled that it plans to charge two individuals for misconduct related to the London interbank offered rate-rigging scandal. We're not sure who exactly these individuals are or what financial firm they are from because the FCA decided a while back to keep the names of individuals out of its warning notices. (FT columnist Jonathan Guthrie's take on this decision: "A 'wanted' poster isn't much use if the suspect is pictured in silhouette and his name is blacked out to avoid hurting his feelings.) What do the notices say? One individual is a "submitter" accused of rate-rigging and colluding with his buddies on rate-rigging and one is a bank manager who condoned and encouraged rate-rigging. The notices are not considered the FCA's final decision on the charges. Financial Times, New York Times
UBS Earnings: All that restructuring is starting to pay off for UBS. The Swiss bank reported a net profit of 917 million francs ($1 billion) in the fourth quarter, compared with a loss of 1.9 billion francs in the same period a year earlier. (Last year's loss was largely related to legal costs; this year's earnings benefitted from a tax gain.) UBS raised its bonus pool 28% as a result of its earnings. New York Times, Wall Street Journal, Financial Times
Personnel Changes: Howard V. Richardson has resigned from Wells Fargo's board due to undisclosed personal health reasons. Top analyst Paul Sankey has left Deutsche Bank for boutique firm Wolfe Research LLC. Dina Powell, Goldman's charitable foundation chief, will now also lead the firm's urban investment group. Longtime Citigroup veteran James Bardrick will vacate his role as co-head of corporate and investment banking for Europe, Middle East and Africa to lead the bank's U.K. operations.
Wall Street Journal
European banks, including those in Spain, Italy and France, are re-entering the acquisition market. "The desire for deals speaks to the cautious optimism sprouting up in corners of the continent's banking industry after several awful years, as well as a search for fresh sources of growth as new regulations crimp profits," the paper notes.
More evidence of cautious optimism in and around the industry: Fed data shows U.S. banks generally eased their lending policies for commercial and industrial loans in the fourth quarter.
Western Union will remain under supervision and may face more penalties after Arizona's attorney general reported the firm had failed to put in place sufficient controls to prevent money laundering.
Here's a bit of an odd trends piece: "since the financial crisis, a raft of young investment bankers" has come to see "food entrepreneurship as a better alternative to the money markets."
New York Times
Detroit's bankruptcy is causing problems for Bank of America and UBS. The banks oversaw a deal to finance Detroit's pension system, which has now become the subject of a lawsuit brought by the city's emergency manager. "The financial institutions that helped raise money for Detroit's pension system are dismayed now to see themselves portrayed as shady characters in the new lawsuit," the paper notes.
Dealbook columnist Peter J. Henning says more Bitcoin regulation is inevitable: "The regulations in place for virtual currency exchanges may not be enough to satisfy law enforcement's desire to keep criminals from creating a new avenue for transferring value across borders. If someone was able to gather up enough Bitcoin while avoiding scrutiny from virtual currency exchanges, then the transactions could fly beneath the regulatory reporting rules."