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JPMorgan Unloads: JPMorgan Chase agreed to sell a $1.3 billion debt and securities portfolio to Bain Capital's Sankaty Advisors, both the Wall Street Journal and Bloomberg reported. Chase's Hong Kong-based portfolio group, called the Global Special Opportunities Group, invests mainly in high-yield debt. Chase's sale of the unit is part of the wider trend of big banks unloading assets to comply with rules that they improve capital ratios and comply with the Volcker Rule.
Wall Street Journal
The Office of the Comptroller of the Currency has raised questions about whether JPMorgan Chase was steering its private-banking clients to its own investment products, the Journal reported, citing anonymice. As a result, Chase now is spelling out to its clients the differences between its own products versus those managed by outside groups, as well as letting customers know how much of their assets are invested in each. It's unknown whether regulators have closed the case.
Maybe John Paulson didn't make quite the killing on CIT's OneWest purchase that was initially thought. That's Heard on the Street's take, based on an analysts looking at both relative and risk-adjusted terms, as well as taking into account the loss-sharing and guarantees acquired from the FDIC. The final tally: Paulson and the other private-equity investors posted a 235% gain on their OneWest investment, compared to the following gains of these banks over the same time period: Bank of America at 397% and Citigroup at 385%.
More bankers think underbanked customers present the greatest opportunity for growth, according to a new KPMG study. About 23% of 100 bank executives surveyed (the study canvassed bankers at institutions of varying sizes) said underbanked customers were the best growth opportunity, up from 12% a year ago. In another surprising result from the KPMG study, about 41% of bankers said they plan to increase their number of branches over the next 12 to 18 months.
Congress has procrastinated on so many bills, and has so little time left in this year's session, that it may not get around to extending the charter of the Export-Import Bank. Republicans want the bank's charter to expire anyway, saying it's a source of corporate welfare, as American Banker has reported.
Canada's banks have paid about $700 million in initial compliance expenses related to the Foreign Account Tax Compliance Act, a law that went into effect on July 1 and is designed to crack down on tax evasion by expatriates.
The New York Fed is pressuring the largest banks to improve their ethics in the wake of the rigging of Libor and other foreign exchange rates. One way the Fed is doing this is by incorproating new questions in its evaluations, such as whether a bank has the right compensation and performance structure in place to ferret out bad behavior.
Except for a few analysts who grumble that he "screw[ed] up" the RBC Centura banking operation in the U.S., most observers laud the tenure of Gordon Nixon, who's retiring this week as chief executive of Royal Bank of Canada.