Moving out: Wells Fargo reached a deal to sell 52 retail branches to Flagstar Bancorp — about $2.3 billion in deposits and $130 million in loans. The sale includes all of Wells branches in Indiana, Michigan and Ohio plus four in Wisconsin. Wells wants to reduce its branch network to about 5,000 branches by the end of 2020 from more than 5,800 at the end of last year.
Separately, the Office of the Comptroller of the Currency’s investigation into Wells’ phony accounts scandal two years ago found similar problems at other banks, American Banker reports. After the Wells scandal came to light, the OCC reviewed sales practices at more than 40 large and midsized banks and found “several systemic issues — and hundreds of problems at individual institutions,” the paper says. “The review uncovered specific examples of other banks opening accounts without proof of customers’ consent. It also spurred the issuance of warnings on five specific industry-wide issues that banks needed to address, and more than 250 specific items regulators wanted fixed at individual banks.”
Former OCC chief Joseph Otting's CRA proposal was finalized in 2020. However, acting Comptroller Michael Hsu rescinded that in favor of the joint proposal.
Andrew Harrer/Bloomberg
The reviews have not been publicly disclosed and the OCC has no plans to do so.
Wall Street Journal
Clouds down under: Recent scandals at some of Australia’s largest banks, previously among the world’s most profitable financial institutions, have not only “dented their image” but may have opened “an impending slew of regulatory fines to worry about,” the Heard on the Street column says. “The scrutiny is likely to push banks to tighten the lax lending standards of recent years that have helped make Australia’s housing market ever more expensive. A souring property market would be a major drag on banks’ profitability, given home lending’s important role in their earnings.”
Financial Times
Old battles new: The intense rivalry “raging” between Ripple and Swift could “decide how cross-border payments are handled for decades to come. It is a contest that encapsulates much of the debate about blockchain and cryptocurrencies, pitting a start-up company [Ripple] betting heavily on these new technologies against a long-established group [Swift] arguing for more incremental change.”
Snafu probed: The U.K.’s Financial Conduct Authority is launching a formal investigation into April’s massive IT glitch at TSB “after suggesting the bank’s poor response to the crisis risked damaging trust in the entire sector.” The British bank, which is owned by Spain’s Sabadell, botched the transfer of thousands of accounts from Lloyds Banking Group due to IT problems.
“The new platform built by Sabadell proved unable to cope with the volume of customers trying to access it when it went live,” the paper says. “Six weeks later, some retail and business customers are still having problems making payments and the bank’s website cautions that its branches and call centers are still busier than usual. The confusion has also encouraged fraudsters to target customers, with police reporting a tenfold increase in reports of ‘phishing’ attempts.”
Alipay primer: This 2½ minute video explains “The Alipay phenomenon and how it works.” Alipay, China's biggest mobile payment service, has 622 million users and handles more than half of the country's $15.5 trillion payments market.
More Deutsche departures: Three more senior executives are leaving Deutsche Bank. Alasdair Warren, who was recruited away from Goldman Sachs three years ago to help lead DB’s investment bank, and Chris Blum and Scott Sartorius, co-heads of the U.S. leveraged finance business, are all departing.
Bailing out: Nearly $11 billion has been taken out of exchange traded funds that hold European shares in the past three months, the most since record-keeping began in 2008. Financial stocks have borne “the brunt of withdrawals.”
New York Times
Give 'em what they want: Susquehanna International Group, one of the largest players in trading stocks, options and ETFs, has quietly built up a desk that trades millions of dollars’ worth of bitcoin and other cryptocurrencies. “The move is the latest sign that the virtual currency markets, which were once relegated to the fringes of the financial world, are being embraced by big, mainstream investors.”
Quotable
“Banks face a serious image problem. They are increasingly seen as ruthless moneymaking machines.” — Atta Tarki, founder of Los Angeles-based recruiter Ex-Consultants Agency, noting that more MBA graduates are seeking other fields to work in other than financial services.
At a time of mild or nonexistent loan growth, middle-market borrowers in the Lone Star State are providing a boost to Fifth Third Bancorp and Huntington Bancshares.
New details have emerged about the negotiations that culminated in Capital One's blockbuster $35 billion agreement to acquire Discover. At one point last December, the two parties broke off discussions, according to a securities filing.
According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.
The Alabama regional lender says it expects expenses to taper off this year and anticipates challenged loans will gradually rise to historically average levels.
Truist Financial's top executive leadership team announces departures; First Horizon's chief credit officer is retiring; Ferry teams with Highnote to roll out a new Visa-branded payroll card; and more in the weekly banking news roundup.
The Dallas-based regional bank tapped a client for its co-pilot capabilities, where employees can message a bot instead of a human to get tech assistance.
