Wall Street Journal
The IPO market has been dreadful of late. A few big-name financial-services companies held IPOs last year and they have been hurt by the carnage. First Data raised $2.82 billion from its Oct. 14 IPO, but since then its shares have fallen 29%. Square had to sell shares in its IPO below the level at which the company was valued by private investors in 2014. However, Square's stock has risen 11% since its IPO.
About 175 companies held IPOs in 2015 and about 70% of those are trading below their IPO prices. The S&P 500 has fallen about 7% since the beginning of 2015. Many potential offerings are sitting on the sidelines for the time being. There were no IPOs in January and only four so far in February.
One sector of the IPO market that has experienced a little bit of success: Mutual thrifts converting to stock banks. There were 11 mutual conversions in 2015 and of those, nine are trading above their IPO pricing, according to BankInvestor.com. Shares of MW Bancorp, the holding company for the $115 million-asset Watch Hill Bank in Cincinnati, have been the top performer of the group, rising 44% since its January 2015 IPO.
Citigroup plans to downsize its operations in three South American countries. Citi will sell its retail banking and credit card businesses in Argentina, Brazil and Colombia. It will keep its corporate and institutional client operations in those nations. It's the latest shrinkage overseas by Citi, after exiting other countries including its closure last year of Banamex USA in Mexico.
General Motors continues to re-enter the banking market. The Detroit automaker has launched an online bank in Germany, through its GM Financial subsidiary. Operating as Opel Bank, the bank's deposit-gathering has allowed GM to raise $1.3 billion in new funding. GM has no plans to expand its retail banking footprint, although a spokesman said it's "constantly looking for new sources of funding."
GM has been aggressively moving to bulk up its financing operations, following its spinoff of GMAC, now known as Ally Financial. Those moves have included dropping contracts with Ally and moving them over to GM Financial. GM Financial is the renamed version of AmeriCredit Corp., which GM acquired in 2010.
When Harvest Capital Strategies last month called for the ouster of Steve Streit as CEO of Green Dot, it put Harvest's leader, Jeffrey Osher, in a position he didn't want to take: activist investor. Osher is one of a new class of investors the Journal describes as reluctant activists. These are investors who would prefer to quietly work with management behind the scenes, instead of publicly airing their grievances. Other companies targeted by "reluctavists" include the airline United Continental, fallen Internet star Yahoo and the aforementioned General Motors.
New York Times
The Fed is in danger of losing its tough-guy image. By approving Capital One Financial's application to repurchase $300 million more of its shares than had previously been allowed under last year's stress tests, the Fed is setting a dangerous precedent, the Breakingviews column suggests.
Capital One wants to buy back its stock before a stock market rally raises the price of its shares. But while Capital One's buyback won't threaten its capital ratios, Capital One is exploiting a loophole and the Fed should not encourage banks to skirt the intention of the stress tests.
The Washington Post takes a broad look at the litany of troubles now facing large banks. Those worries include, but are not limited to, calls to bust up the megabanks by Minneapolis Fed President Neel Kashkari and Democratic presidential candidate Bernie Sanders; the nagging fear that super-low interest rates are here to stay; the possibility that energy-loan losses could get even bigger; and the general weakness in banks' stock prices. At least banking isn't the taxi-cab sector.
Dallas Business Journal: JPMorgan Chase plans to expand its wealth management operations in the Dallas-Ft. Worth area and add mortgage and small business loan officers in the area. The expansion comes as JPMorgan plans to build a new 50-acre campus in Plano, Texas, where it will consolidate about half of the company's 12,000 total workers in the Dallas area.