Stripe poaches GM's CFO; Goldman's Solomon shows his mettle

Receiving Wide Coverage ...

Earning her stripes

“Stripe has poached General Motors’ chief financial officer Dhivya Suryadevara, bolstering its executive team as the San Francisco-based online payments company rides a wave of ecommerce growth,” the Financial Times reported. “Stripe, which ranked alongside Elon Musk’s SpaceX as the most valuable private tech company in the U.S. earlier this year, has been building out its senior team in recent months. Its recruitment of Ms. Suryadevara follows last week’s hire of Mike Clayville from Amazon’s Web Services unit as chief revenue officer. Earlier this year, Stripe hired a new general counsel, Trish Walsh, from Voya Financial, the U.S. retirement plan provider.”

“Stripe said Ms. Suryadevara will help the company as it expands its global operations,” the Wall Street Journal said. “The 2,800-employee company has brought its payments-processing service to 15 new countries in the past year.”

CEO jobs council

“Leaders from major U.S. companies, including banks and tech giants, have formed a group aimed at increasing the hiring of individuals from minority communities in New York. The New York Jobs CEO Council, which counts chief executives from 27 firms among its members, aims to hire 100,000 people from low-income Black, Latino and Asian communities by 2030.”

JPMorgan Chase CEO Jamie Dimon is one of the co-chairs of the group, which also includes the CEOs of Citigroup, Bank of America, Mastercard and Goldman Sachs among its members. Reuters, New York Times

Wall Street Journal

Inflated financials

“Thousands of commercial-mortgage borrowers have been struggling to meet payments on their loans in the midst of the coronavirus pandemic. But aggressive lending practices that overstated borrowers’ ability to repay” may be partly to blame, according to a study of nearly 40,000 loans by two University of Texas finance professors.

“The findings suggest that loans sold to investors before the pandemic frequently featured overstated income and could have more trouble staying current in case of a downturn. The findings corroborate a complaint received last year by the Securities and Exchange Commission stating that commercial mortgage loans frequently feature inflated financials.”

Bucking the trend

Italy’s FinecoBank, which “specializes in investment advice and eschews a traditional branch network, has flourished” during the pandemic, unlike most of its European competitors. “Fineco’s growth is partly due to its focus on investment advice—much in demand since the crisis hit and customers scrambled to protect their investments. Fineco’s costs are much lower than those of most banks because it doesn’t operate a traditional branch network where cash can be deposited.”

The bank’s stock has “soared 24% this year, making it one of the best performers” in the Stoxx Europe 600 Banks Index, which is down 32%.

Financial Times

Blank check boom

Wall Street investment banks are “jostling to get in on the hot new trend” of so-called blank check companies. “Special purpose acquisition companies, or Spacs, have grown from a niche part of equity markets to become a popular alternative route to public markets. Such vehicles raise money from investors with the aim of finding a private company to buy; if the sponsors fail to do that within a certain period, the Spac is dissolved and the money returned to shareholders.”

“The rise of the Spacs has generated thick streams of fee income for underwriters and prompted several investment banks to reshuffle their equities teams to ride the trend. Spacs have raised $23.9 billion this year. Almost all of that — $23.6 billion — was generated in the U.S. Blank check companies now account for one in five dollars raised in initial public offerings, about three times the share of last year.”

Fees at risk

At the same time, “Wall Street banks have earned hundreds of millions of fees from Chinese companies selling shares in New York and Hong Kong in 2020, illustrating the fee pool that is at stake as Washington threatens to delist these companies from U.S. markets. American bank fees from initial public offerings, follow-on share sales and convertible bonds issued by Chinese companies are up about 24% from a year ago at $414 million.”

“The growth in activity comes amid rapidly deteriorating U.S.-China relations this year. On Friday, the Trump administration proposed forcing Chinese companies to delist from U.S. stock exchanges unless regulators get access to their audits.”

New York Times

Up to the challenge

The coronavirus pandemic, which hit as Goldman Sachs CEO David Solomon was “still getting situated, presented him with the biggest leadership challenge — and opportunity — of his short time atop the bank. The crisis has shown Mr. Solomon to be a deft navigator who quickly adapted to changes that caught some of his bank’s bigger competitors flat-footed.”

“When New York City went into lockdown in March, Mr. Solomon sent most of the bank’s 40,000 employees home immediately and blessed the firm’s procurement of thousands of monitors and landline phone systems for use in home offices. He also got on hundreds of Zoom calls with clients to reassure them that Goldman would help see them through their mounting obstacles — and not necessarily for a fee.”