There's the door: Wells Fargo said it fired four senior retail banking executives following its board's independent investigation into the phony accounts scandal. While the bank has said it fired more than 5,300 employees over the past five years for improper sales practices, Tuesday's statement appears to be the first time Wells has publicly announced the firing of senior people in its retail bank as a result of the scandal. The executives won't get their 2016 bonuses and will forfeit unvested equity and vested outstanding options. Wall Street Journal, Financial Times, Washington Post, American Banker
A Fannie Mae logo is pictured outside their headquarters in Washington, DC, on Wednesday, December 29, 2004. Fannie Mae, the biggest provider of money for the U.S. mortgage industry, will sell as much as $4 billion of preferred stock after its regulator said it broke accounting rules and is ``significantly undercapitalized.'' Photographer: Jay Mallin / Bloomberg News
Jay Mallin/Bloomberg News
A bad bet: A federal appeals court Tuesday upheld a ruling that bars most legal claims by investors in Fannie Mae and Freddie Mac, who assert the government illegally seized billions of dollars from the two federal mortgage agencies. Investors who bought stock in the two companies sued the government after it unilaterally amended the terms of its bailout of Fannie and Freddie and captured billions of dollars in profits generated by the two agencies.
"The ruling was a setback for hedge funds and other distressed-asset investors who bought up shares in the companies over the past few years, betting that they could force Congress, the White House or courts to make a U-turn on plans to revamp the housing-finance companies and score a large windfall," the Wall Street Journal commented. Shares in both Fannie and Freddie plunged by a more than a third after the ruling was announced. Wall Street Journal, Financial Times, Washington Post, American Banker
Hard times: Shares in HSBC Holdings dropped nearly 7% Tuesday, its biggest one-day loss since 2009, after it reported unexpectedly weak fourth-quarter results and a mixed outlook for this year. "Executives at the bank said a changed U.S. stance on global trade, the rise of populism in Europe and Britain's planned exit from the European Union have added uncertainty in HSBC's key markets," the Journal reported. The bank's net loss widened to $4.23 billion in last year's fourth quarter from $1.33 billion in the year-earlier period. Full-year net profit dropped to $2.48 billion from $13.52 billion. Regulators apparently are also looking into the bank's anti-money-laundering processes. Wall Street Journal, Financial Times, American Banker
Wall Street Journal
A really big deal: Three big commercial banks – JPMorgan Chase, HSBC and Morgan Stanley – were awarded the lead underwriter spots for the planned initial public offering of stock in Saudi Arabia's state-owned energy company, which is expected to be the largest such deal ever. Saudi Arabian Oil Co., better known as Saudi Aramco, is planning to offer as much as a 5% stake that could realize as much as $100 billion to $150 billion.
Overexpansion: A growing glut of residential rental units is prompting big banks to retreat from financing new apartment projects, "forcing developers to look to nontraditional lenders and seek more expensive types of financing to complete projects," the paper reports. According to Axiometrics, a real estate research firm, nearly 400,000 new apartments, a 30-year high, are expected to be completed this year, amid signs that landlords are having troubling filling units that are already on the market. In last year's fourth quarter, only 50,000 of 88,000 new units were rented.
Quotable ...
"No one who was directly managing this has been held accountable except for lower-level team members." – A retail banking executive at Wells Fargo
The bank, which owns 48.5% of the Greek fintech, is battling with the company's owners over how to determine valuation, among other disputes. JPMorgan says it is reviewing aspects of the legal case but is still seeking a $1 billion claim in Greece.
Three executives at Space City Credit Union in Houston will get a total of $6.75 million if the cooperative's members approve a merger. The 12,000 or so members will split $5 million.
The Trump administration has withdrawn from the Federal Register a proposed rule that sought to protect consumers from having their sensitive financial information sold.
New York Attorney General Letitia James is accusing Capital One of deliberately deceiving customers and obscuring higher interest rates. The lawsuit comes less than three months after the CFPB dropped a similar case against the bank.
A joint study by the Federal Reserve Bank of New York and the Bank for International Settlements found that a shift to widespread tokenization would not impact central banks' ability to transmit monetary policy, and that the technology could even prove beneficial.
