Synovus to buy Cabela’s deposits; Quarles eyed as Fed vice chair

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Bank of America's first quarter earnings jumped 40% as revenue rose 7%, easily beating analysts' expectations. Wall Street Journal, Financial Times

Goldman Sachs reported higher profits and revenue and raised its quarterly dividend but fell short of estimates. Wall Street Journal

Wall Street Journal

Seal the deal: As expected, Synovus Financial has agreed to buy the banking assets of Cabela's Inc., which will allow the outdoor retailer's $4.2 billion sale to rival Bass Pro Shops to proceed. Under the terms of the deal, Capital One will buy Cabela's credit card portfolio while Synovus will acquire its $1.2 billion in deposits. Originally, Capital One was supposed to buy both financial pieces but ran into regulatory snags, which threatened the entire transaction. Synovus will receive $75 million for helping to save the deal.

New Fed bank supervisor: President Trump is expected to name Randal Quarles, a former top Treasury Department official under President George W. Bush, as the Federal Reserve's vice chairman for bank supervision. Quarles currently runs Cynosure Group, a Salt Lake City-based investment firm he co-founded.

Head's up: The Journal's Heard on the Street column says bank investors "should start paying attention" to growing risk in banks' consumer credit portfolio. "The more immediate risk is a slowdown in consumer spending, which will hurt more than just lenders," the Journal says. But credit risk is also a growing worry, especially in student loans, auto loans and credit cards, which have been growing in size even as mortgage lending has been flat.

Upping the Ant-e: Ant Financial raised its bid for U.S. money-transfer company MoneyGram International to about $1.2 billion, topping a rival $1 billion offer from Euronet. Ant originally offered $880 million for MoneyGram before Euronet entered the picture.

Too timid?: David B. Rivkin Jr. and Andrew M. Grossman, who practice appellate and constitutional law in Washington, can't understand why President Trump doesn't fire Consumer Financial Protection Bureau Director Richard Cordray, who, they say, "continues the Obama administration's regulatory crusade against lenders, blocking access to the credit that supports so many small businesses and so much consumer spending."

"If reports from the West Wing are to be believed, Mr. Trump's unusual timidity is the result of overcautious legal and political advice," they write in an op-ed piece.

Unprepared: Former Homeland Security secretary Tom Ridge says the majority of corporate boards and CEOs are unprepared to deal with cyber risk. Citing a recent study by the National Association of Corporate Directors, nearly 60% of directors say their boards find dealing with cyber risk challenging, while less than 20% says boards possess a high level of knowledge about cybersecurity.

Financial Times

Don't bet against him: Former Fed Chair Paul Volcker is expected to give a "defiant speech" at the annual meeting of the Bretton Woods Committee, defending the merits of the rule that bears his name. "However unpopular the Volcker rule might be on Wall Street, no one believes there would be appetite in Congress to do away with it," the FT writes. "Tweaks around the edges are probably the most that banks can hope for. It would be foolish to bet against Mr. Volcker or predict the demise of his rule any time soon."

In a separate guest post, former banker and banking lawyer Martin Lowy proposes a simpler solution for limiting banking risk. "There is a strong relationship between the survival of the Volcker Rule and the need for a new Glass-Steagall-like separation between commercial and investment banking," he writes. "Trading is much riskier than the other aspects of both commercial and investment banking. If the Volcker Rule survives in a strong form, no new separation is needed. If it does not, however, policymakers and regulators will need to find a suitable replacement."

Elsewhere ...

Another Wells suit: A New Jersey woman is suing Wells Fargo and three supervisors at the bank, claiming she was fired for refusing to participate in the bank's phony accounts scandal. Melinda Bini, a former assistant vice president and regional private banker at the bank's Highland Park branch, said her supervisors told her to "manipulate accounts and sell banking products or investments that were not in the customers' best interest or without their knowledge," according to


"Why would a president who made a TV show out of firing underlings now suffer a subordinate who refuses to get with the pro-growth agenda he campaigned on?" — Attorneys David B. Rivkin Jr. and Andrew M. Grossman, about CFPB Director Richard Cordray.

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M&A Earnings Cyber security Volcker Rule Federal Reserve