Receiving Wide Coverage ...
Canadian Invasion: The Wall Street Journal, Financial Times and Reuters (via the New York Times) all take a closer look at Royal Bank of Canada's decision to acquire City National in Los Angeles. RBC may have stubbed its toe in its previous American incursion with RBC Centura (which it later sold to PNC), but City National is a different play. The California bank has a big presence in wealth management, particularly managing money for individuals and companies attached to the entertainment industry. Then there's the fact that Canada itself offers far less-appealing growth prospects than the U.S., and RBC's Canadian rivals Toronto-Dominion and Bank of Montreal have well-established presences in the U.S. The FT believes RBC overpaid, saying that by shelling out 2.6 times tangible book value, and 20 times forward earnings, RBC won't be able to achieve earnings-per-share growth for about three years. And Reuters points out since there is so little overlap between RBC and City National, the Canadian bank is going to be able to achieve only a small amount of savings, about 8.8% of City National's noninterest expense. But the Journal's "Heard on the Street" column disagrees, saying RBC got a good deal, based on the price-earnings ratio. (By the way, the Journal's photo accompanying the "Heard on the Street" column, as recently as Friday morning, pictures an office of City National Bank of Florida, not the City National in California that RBC is acquiring.)
Wall Street Journal
JPMorgan Chase CEO Jamie Dimon is set to receive about $20 million in compensation for 2014, the same amount as in 2013, but with more of the compensation in cash. For 2014, the compensation is broken up into about 40% cash and 60% stock, compared to the 2013 package, which was all stock. The package includes an $18.5 million bonus (on top of his $1.5 million base salary), and about $7.4 million of that bonus is in cash. JPMorgan CFO Marianne Lake and Mary Erdoes, head of asset management, will both receive raises. Goldman Sachs CEO Lloyd Blankfein is set to receive a 4% raise in his overall compensation for 2014.
The Financial Times examines Barclays' arguments in trying to get tossed the lawsuit that accuses it of misleading clients about its "dark pool" trading venue. Barclays argues the New York attorney general's amended complaint is a last-ditch attempt to save the litigation, which had been sharply criticized by a New York state judge. "How is anybody going to defend against this?" Justice Shirley Werner Kornreich asked during oral arguments last month. "There are no names, there are no specifics. It is so conclusory that I have no clue what we're talking about here. This is a fraud claim, but there are absolutely no specifics in this complaint."
New York Times
The Winklevoss twins, famous for their roles in the founding of, and subsequent litigation involving Facebook, are aiming their sights on bitcoin. Cameron and Tyler Winklevoss are trying to create the Nasdaq of Bitcoin, the first regulated exchange of the virtual currency for American customers.
The New Yorker: An article in the Jan. 26 issue of The New Yorker that looks at how the National Security Agency tries to track terrorists also touches on the subject of foreign remittances to Somalia, something American Banker has covered extensively. In fact, The New Yorker, in its eight-thousand, eight-hundred and eighty-one-word piece (hat tip to its bizarre style of writing out all numbers), references a comment Carol Beaumier, a former federal bank examiner, made to American Banker, about how money is transferred from Somalian emigres to the U.S., back to families back home, as well as to hawalas, the informal networks for Islamic money-transfer agents, some of which may be legit, some of which may be fronts for terrorist groups. "Somehow the money's going to move," Beaumier told American Banker.