Wall Street Journal PayPal rocks: PayPal said its third-quarter profit rose 18% while revenue jumped 21% “thanks in part to new records in customer accounts and the payment volume it processed,” the paper reports. CEO Dan Schulman said the company’s performance was “perhaps our strongest quarter since our separation from eBay” two years ago. Venmo, the company’s mobile person-to-person payments service, handled $9 billion in volume during the quarter.
Big shoes to fill: American Express CEO Ken Chenault “is going out on a high note,” the Heard on the Street column says. But his successor, Stephen Squeri, “will have to contend with fundamental questions about the company’s business.”
While CFO Jeffrey Campbell said AmEx’s cash back cards are doing well, “whether this can last is open to debate.” At the same time, “cards themselves and the networks they run on could be fundamentally disrupted by an evolving payments landscape,” such as competition from PayPal and others. To be successful, the paper concludes, Squeri “he will have to carry on Mr. Chenault’s legacy of constant reinvention.”
In a separate article, the paper says Squeri must “regain the cachet of the AmEx brand, both for millennials who don’t view it the same way as their parents and for established customers who have been wooed by banks offering better services and more perks.”
Watch that bubble: Buying into a bubble, even one as tempting as bitcoin, usually doesn't end well, warns James Mackintosh, the paper's senior markets columnist. "Bitcoin has already jumped 10-fold in just over a year, and other cryptocurrencies have had even more extreme moves, so if they pop," they could be the largest busts on record, he writes. "True believers argue bitcoin is different, and its price rise is justified because it is the future of money. The history of bubbles suggests that's unlikely, but not impossible."
Cooperation is key: Sharing of financial intelligence between private and public entities “has proved effective in solving some meaningful instances of money laundering and terrorism financing,” the paper reports. “But as these ad-hoc partnerships evolve it would be wise to have governance structures in place to ensure their accountability and transparency,” according to a research report by the Royal United Services Institute, a London-based security think tank.
Financial Times Hallo, Frankfurt: Goldman Sachs CEO Lloyd Blankfein tweeted out praise for Frankfurt, a message the paper says “heaped more pressure on Britain’s prime minister Theresa May as she kicked off key Brexit talks at this week’s European summit.”
“Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I’ll be spending a lot more time there. #Brexit.” Blankfein wrote. The tweet comes only weeks after the bank signed a lease in the German financial capital that would allow it to quintuple its staff as it moves jobs out of the U.K.
New York Times Boom or bust?: In an article entitled, “A Boom in Credit Cards: Great News for Banks, Less So Consumers,” the paper takes a swipe at the card industry. The four top American banks — Bank of America, JPMorgan Chase, Citigroup and Wells Fargo — made more than $4 billion in aggregate pretax income from credit cards in the third quarter, it notes. At the same time, outstanding credit card debt hit a record $1 trillion this year, while the number of Americans with at least one credit card reached 171 million, the highest level in more than a decade. The article includes a prominent photo of a customer in a wheelchair, “whose only income is Social Security and who struggles each month to make the minimum payments on all her cards.”
Quotable “There are a few things I’d like to talk about. When I got out of college after World War II, we were the kings of the world. The American century has deteriorated a bit. It’s been an interesting arc of history.” — Former Federal Reserve Chair Paul Volcker, discussing the memoirs on which he is working.
Federal Reserve Governor Michelle Bowman said she believes there is a feasible path forward for the revised capital reform proposal, emphasizing the importance of making broad changes informed by industry feedback to achieve broad consensus among Federal Reserve board members.
From the early uncertainty and illness associated with Covid-19, to subsequent wars, supply chain issues, rising prices, inflation and layoffs, there has been a lot to deal with. And workers are in the doldrums right now.
The Office of the Attorney General in New York says the bank violated the state's Exempt Income Protection Act, illegally transferring customers' money to debt collectors.
The Providence, Rhode Island, company is having discussions with private wealth management teams elsewhere as it seeks to expand its fledgling private bank. In just three months, private banking deposits doubled to $2.4 billion.
After the Minneapolis-based company reported stubbornly high commercial deposit costs, it reduced its full-year forecast for net interest income by $200 million-$500 million.