FINANCIAL

Big banks will always be too big, Glass-Steagall or not

AMERICAN BANKER - 56 min 40 sec ago
Data analysis shows that a 21st-century version of the Depression-era limitations on bank activities will do little to meet the goals laid out by its proponents.
Categories: FINANCIAL

Auto lending woes persist at TCF, hurting bottom line

AMERICAN BANKER - 1 hour 12 min ago
Quarterly earnings at the Wayzata, Minn., company fell as gains from the sale of auto loans continued to slide.
Categories: FINANCIAL

Opus returns to profitability despite ongoing challenges

AMERICAN BANKER - 2 hours 16 min ago
The California company's credit issues eased some in the first quarter, though earnings were down from a year earlier due to charges tied to cost cutting and reductions in three loan categories.
Categories: FINANCIAL

United Airlines debacle has lessons for bank culture

AMERICAN BANKER - 3 hours 20 min ago
While overbooking is a unique issue for the airline industry — and this may be an extreme example — the United episode is a cautionary tale for any service industry, including banking.
Categories: FINANCIAL

Wells broadens settlement; two views on blockchain

AMERICAN BANKER - 4 hours 8 min ago
The bank said it will cover more customers harmed by its sales tactics; one analyst preaches patience on blockchain while a report sees explosive growth.
Categories: FINANCIAL

Fight over CFPB prepaid rule coming to a head

AMERICAN BANKER - Fri, 04/21/2017 - 17:38
The fight over a Consumer Financial Protection Bureau rule adding new restrictions to prepaid cards is intensifying as some Republicans hope to overturn it before a looming deadline expires.
Categories: FINANCIAL

CFPB loses appeal in case involving for-profit colleges

AMERICAN BANKER - Fri, 04/21/2017 - 17:06
A federal appeals court rejected Friday an appeal by the Consumer Financial Protection Bureau to investigate an accreditor of for-profit colleges.
Categories: FINANCIAL

Investment banking answers regionals' prayers, stays in D.C.'s crosshairs

AMERICAN BANKER - Fri, 04/21/2017 - 16:50
Fees from capital markets activities have propelled profits at several regional banks when they needed it —and just as the Glass-Steagall redux crowd wants to kill it.
Categories: FINANCIAL

Tim Sloane

AMERICAN BANKER - Fri, 04/21/2017 - 16:34
Tim is the Vice President of Payments Innovation at Mercator Advisory Group and guides research in the many complex technologies impacting payments including biometrics, identity management, blockchain, tokenization, IoT, machine learning and cloud technology, to name a few.Tim’s background includes management of a software Research & Development organization that was responsible for developing and certifying international data communications products. Tim installed the first ATM’s in NYC and also installed and managed SWIFT systems for several major banks as well as trading systems on the floor of the NYSE. Tim started with Mercator in 2004 as Director of the Debit Advisory Service, created the Prepaid Advisory Service in 2005, became VP of Payments Innovation in 2014. Most recently Tim helped develop the machine learning platform that is the foundation of Gray Owl Networks, a Mercator sister company. Tim has been an expert witness in federal and state courts, contributed to FDIC research, and is widely quoted in both financial and industry press, including the Wall Street Journal, New York Times, American Banker, and Digital Transactions. He is a highly sought after speaker both domestically and abroad and has presented at many industry conferences and payment supplier events.
Categories: FINANCIAL

Debt to the Penny for 04/20/2017

Debt Held by the Public: 14,319,510,296,937.08
Intragovernmental Holdings: 5,526,783,380,500.72
Total Public Debt Outstanding: 19,846,293,677,437.80

Big banks take on ultimate omnichannel challenge: Mobile mortgages

AMERICAN BANKER - Fri, 04/21/2017 - 16:02
The development of mobile mortgage solutions has to strike a delicate balance between self-service and making humans readily available for the stressful process.
Categories: FINANCIAL

Subprime auto lenders put on notice over ties to shady dealers

AMERICAN BANKER - Fri, 04/21/2017 - 16:02
Santander Consumer is paying $26 million to settle allegations that it responded halfheartedly to dealer misconduct. The eye-popping charges are shining a light on the hard-to-measure problem of auto dealer fraud, while also raising questions about the adequacy of lenders’ efforts to combat bad behavior.
Categories: FINANCIAL

One less female CEO-CFO duo; Supreme manteruppting

AMERICAN BANKER - Fri, 04/21/2017 - 14:58
Carol Hayles’ departure from CIT leaves us with one less female CEO-CFO team in banking; even Supreme Court justices get manterrupted; a Google doodle celebrates a microlender; and Sen. Elizabeth Warren strikes a pose.
Categories: FINANCIAL

Wells Fargo investors should apply pressure to repair the damage

AMERICAN BANKER - Fri, 04/21/2017 - 14:26
While many shareholders are by now largely immune to the transgressions of the U.S. banking sector, Wells Fargo’s recent phony account scandal has given even the most hardened cynics pause.
Categories: FINANCIAL

BBVA taps blockchain to make fast international payments

AMERICAN BANKER - Fri, 04/21/2017 - 14:26
BBVA taps blockchain to make international payments in seconds
Categories: FINANCIAL

Trump memos call for review of systemic designation

AMERICAN BANKER - Fri, 04/21/2017 - 13:38
President Trump's executive orders question Obama era financial crisis prevention system
Categories: FINANCIAL

Trump invites trouble in targeting FDIC resolution powers

AMERICAN BANKER - Fri, 04/21/2017 - 12:34
The president’s targeting of FDIC’s Orderly Liquidation Authority may ultimately heighten concerns about “too big to fail.” Here's why.
Categories: FINANCIAL

A market-related twist to the Dortmund bombing

THE ECONOMIST - Fri, 04/21/2017 - 11:51

WHEN three explosive devices hit a bus carrying the Borussia Dortmund football team on April 11th, it was immediately assumed that it was another Islamist attack. Notes were found at the scene of the crime alleging that Islam was the motivation, with the author claiming a link to the terrorist group Islamic State. But prosecutors in Germany allege a completely different rationale. They say that the suspect, a 28-year-old man, had borrowed money and taken out put options, which would benefit from a decline in Borussia Dortmund shares (which fell 3% on the day after the attack). 

As yet, the suspect has not been convicted. But if true, the story would seem to come straight out of Hollywood. In the film “Casino Royale”, James Bond (as played by Daniel Craig) foils a plot to blow up an airliner owned by the fictional firm Skyfleet, after villain Hugo le Chiffre had sold the company's shares short (ie, bet on their price to fall). In “The Fear index”, a Robert Harris novel, a hedge fund's trading programme shorts an airline's stock just before a fatal crash. It was rumoured, after the September 11...Continue reading

Categories: FINANCIAL

Is Tom Stuker the world’s most frequent flyer?

THE ECONOMIST - Fri, 04/21/2017 - 11:26

“AFTER entering a competition a lucky punter wins first prize: a week’s holiday in Skegness. Second prize is two weeks there.”

For some reason this most ancient of British jokes came to Gulliver’s mind when he read about Tom Stuker in the International Business Times. Mr Stuker, it is claimed, is the world’s most frequent flyer. He is about to clock up his 18-millionth mile on United Airlines. And as the Boarding Area blog points out, 18m miles with United means just that:

United calculates million miler status based on your “butt in seat” revenue miles flown on United. That’s right, we’re not talking about 10 million award miles, or even 10 million miles taking into account elite bonuses for flying first or business class.

Mr Stuker is president of a firm that trains sales staff at car dealerships around the world. He has flown to Australia over 300 times for business and pleasure; he travels to Hawaii “three...Continue reading

Categories: FINANCIAL

Wells Fargo adds cash, additional years to class-action settlement

AMERICAN BANKER - Fri, 04/21/2017 - 11:14
The San Francisco bank is adding $32 million to a previously announced agreement, and also extending it back to 2002, in the wake of a report on the roots of the firm's phony sales scandal
Categories: FINANCIAL

Citi names Chubak to head consumer retail banking and mortgage

AMERICAN BANKER - Fri, 04/21/2017 - 11:14
Citi has named David Chubak as head of global retail banking and mortgage for the global consumer bank, replacing Jonathan Larsen, who resigned late last year.
Categories: FINANCIAL

Commercial lending drives surge in Webster's 1Q profit

AMERICAN BANKER - Fri, 04/21/2017 - 10:42
Strong gains in low-cost health savings account balances helped fuel loan growth at the Waterbury, Conn., company.
Categories: FINANCIAL

Killing CDFIs would make bad situation worse for small business

AMERICAN BANKER - Fri, 04/21/2017 - 09:36
A Trump administration budget proposal to end federal funding for community development financial institutions would push small businesses to high-risk, high-cost lenders.
Categories: FINANCIAL

Bridging a finance gap for community banks, small businesses

AMERICAN BANKER - Fri, 04/21/2017 - 09:20
Working primarily with community banks, Promontory Local Credit will provide second-lien loans to small firms, potentially increasing their available credit by 50%.
Categories: FINANCIAL

Revenue rises 7% at SunTrust

AMERICAN BANKER - Fri, 04/21/2017 - 09:04
The Atlanta company's profits rose on stronger net interest income and investment banking income as well as a tax maneuver.
Categories: FINANCIAL

Ocwen takes another hit; U.S. Bancorp joins card fight

AMERICAN BANKER - Fri, 04/21/2017 - 08:48
Stock plunges more than 50% after CFPB, states sue subprime loan servicer for allegedly abusing customers; regional bank looks to underprice Amex and JPMorgan's upscale credit cards.
Categories: FINANCIAL

‘Doesn’t Congress have more important things?’: Comments of the week

AMERICAN BANKER - Fri, 04/21/2017 - 08:48
Readers sound off an attempt to block prepaid regulations, threats to consumer privacy, FSOC’s political bent, the proper use for SARs, and more.
Categories: FINANCIAL

Associated Banc-Corp. hits growth targets, reports CRA upgrade

AMERICAN BANKER - Thu, 04/20/2017 - 19:40
The Wisconsin regional's profits rose 35% in the first quarter on healthy loan growth, wider margins and an improved efficiency ratio while saying its "satisfactory" CRA rating had been restored.
Categories: FINANCIAL

Regionals’ coping strategy: Cost-cutting, innovation, a lot of patience

AMERICAN BANKER - Thu, 04/20/2017 - 17:30
Executives at BB&T, KeyCorp and Citizens are milking commercial lending niches and balancing cost control with new investments while waiting for more rate hikes to fatten margins.
Categories: FINANCIAL

United Community to buy HCSB Financial in South Carolina

AMERICAN BANKER - Thu, 04/20/2017 - 17:14
The deal is the latest coastal acquisition for United Community. For HCSB, the sale is the final chapter in a turnaround that began 13 months earlier.
Categories: FINANCIAL

U.S. Bank ties perks of high-end card to mobile payments

AMERICAN BANKER - Thu, 04/20/2017 - 17:14
Banks have long believed that the key to sparking mobile payments is better incentives, but U.S. Bank is taking that to the extreme with a new product that pays triple points for such purchases.
Categories: FINANCIAL

A look at UMB's decision to sever ties with its funds business

AMERICAN BANKER - Thu, 04/20/2017 - 16:26
Mariner Kemper, UMB's chief executive, said he struggled with the decision to sell Scout Investments to Raymond James. Selling made more sense than pumping more capital into the beleaguered business.
Categories: FINANCIAL

Debt to the Penny for 04/19/2017

Debt Held by the Public: 14,323,623,827,289.64
Intragovernmental Holdings: 5,522,440,859,133.26
Total Public Debt Outstanding: 19,846,064,686,422.90

Mnuchin targets FDIC powers, Volcker as top reg priorities

AMERICAN BANKER - Thu, 04/20/2017 - 16:10
Treasury Secretary Steven Mnuchin said fixes to orderly liquidation authority and the Volcker Rule would be included in regulatory recommendations to the president due this summer.
Categories: FINANCIAL

Tim Sloane

AMERICAN BANKER - Thu, 04/20/2017 - 15:54
Tim is the Vice President of Payments Innovation at Mercator Advisory Group and guides research in the many complex technologies impacting payments including biometrics, identity management, blockchain, tokenization, IoT, machine learning and cloud technology, to name a few.Tim’s background includes management of a software Research & Development organization that was responsible for developing and certifying international data communications products. Tim installed the first ATM’s in NYC and also installed and managed SWIFT systems for several major banks as well as trading systems on the floor of the NYSE. Tim started with Mercator in 2004 as Director of the Debit Advisory Service, created the Prepaid Advisory Service in 2005, became VP of Payments Innovation in 2014. Most recently Tim helped develop the machine learning platform that is the foundation of Gray Owl Networks, a Mercator sister company. Tim has been an expert witness in federal and state courts, contributed to FDIC research, and is widely quoted in both financial and industry press, including the Wall Street Journal, New York Times, American Banker, and Digital Transactions. He is a highly sought after speaker both domestically and abroad and has presented at many industry conferences and payment supplier events.
Categories: FINANCIAL

A look at UMB's decision to sever ties with its funds business

AMERICAN BANKER - Thu, 04/20/2017 - 15:54
Mariner Kemper, UMB's chief executive, said he struggled with the decision to sell Scout Investments to Raymond James. Selling made more sense that pumping more capital into the beleaguered business.
Categories: FINANCIAL

Proposed Florida de novo clears key regulatory hurdle

AMERICAN BANKER - Thu, 04/20/2017 - 15:22
The Office of the Comptroller of the Currency has given preliminary conditional approval for Winter Park National Bank, allowing organizers to work on office space, hire staff and raise capital.
Categories: FINANCIAL

MBA outlines privatization plan for Fannie, Freddie

AMERICAN BANKER - Thu, 04/20/2017 - 15:22
The Mortgage Bankers Association released a detailed transition plan Thursday designed to help policymakers turn the government-sponsored enterprises into private guarantors of mortgage-backed securities.
Categories: FINANCIAL

Citi CFO: Student loan market shows signs of overheating

AMERICAN BANKER - Thu, 04/20/2017 - 15:06
Student loans are showing signs of growing too fast, perhaps the only market flashing a warning even as the economic recovery grows older, Citigroup Chief Financial Officer John Gerspach said.
Categories: FINANCIAL

Citizens CEO vows 'full scrub' of branch claims, says consumers unharmed

AMERICAN BANKER - Thu, 04/20/2017 - 14:50
The "Citizens Checkup" program to help customers set financial goals has come under fire, but CEO Bruce Van Saun says it is valuable and "here to stay," and that the criticism of it pales in comparison to the Wells Fargo scandal.
Categories: FINANCIAL

CFPB, 20 states take sweeping actions against Ocwen

AMERICAN BANKER - Thu, 04/20/2017 - 14:34
Ocwen Financial and its subsidiaries faced a slew of accusations from federal and state regulators on Thursday, which raised questions about whether the firm could survive.
Categories: FINANCIAL

Dodd-Frank is not the enemy. Bad loans are

AMERICAN BANKER - Thu, 04/20/2017 - 14:34
At the heart of the push to roll back the Dodd-Frank Act are claims that the 2010 reform law is killing lending. But these assertions should be backed by data.
Categories: FINANCIAL

Umpqua creates chief strategy officer role, hires Rilla Delorier

AMERICAN BANKER - Thu, 04/20/2017 - 13:29
Delorier is a former chief marketing officer and head of consumer channels at SunTrust Banks.
Categories: FINANCIAL

Mastercard to resell bill-pay vendor's tech to boost bank revenue

AMERICAN BANKER - Thu, 04/20/2017 - 12:10
Contrary to many third-party payment providers' practice of pushing customers to lower-cost payment rails, Regalii wants its end users to pay their bills with credit cards. The goal of this arrangement is, of course, to make money for banks.
Categories: FINANCIAL

Loan growth not enough to boost Umpqua’s earnings

AMERICAN BANKER - Thu, 04/20/2017 - 11:38
Earnings per share fell a nickel short of estimates due in part to lower-than-expected revenue from the origination and sale of mortgages.
Categories: FINANCIAL

Emirates cuts services to America as Donald Trump’s actions bite

THE ECONOMIST - Thu, 04/20/2017 - 11:06

WHEN American officials announced last month that laptops and tablets would be banned from aeroplane cabins on flights from certain Muslim countries, many questioned the administration's motive. Was it a proportionate response to specific intelligence about a terrorist threat? Or had the government taken the opportunity to clobber swanky foreign operators that compete with the country’s own woeful airlines?

If the latter view is too cynical, we can at least say that, for America's carriers, it has been a serendipitous byproduct. On April 19th, Emirates announced that it is cutting its services to the United States by 20%. The United Arab Emirates (UAE), the airline’s home, was one of ten Muslim countries covered by the laptop ban. By happy coincidence, no American carriers served airports that were affected.

The restrictions on electronic devices are a particular problem for Emirates and the other Middle Eastern “superconnectors”, Etihad, also of the UAE, and Qatar Airways. Direct traffic between America and these airlines’ hubs is modest: most passengers use them to connect to or from other...Continue reading

Categories: FINANCIAL

Another debate about net neutrality is brewing

THE ECONOMIST - Thu, 04/20/2017 - 10:49

THE details around network neutrality, the principle that internet-service providers (ISPs) must treat all sorts of web traffic equally, can be mind-numbingly abstruse. But they fuel passion, nonetheless. After Tom Wheeler, a former chairman of America’s Federal Communications Commission (FCC), proposed unpopular net-neutrality rules in late 2014, for instance, protesters blocked his driveway, forcing him to walk to work. Their action was meant to illustrate the threat of big ISPs erecting toll-booths and other choke-points that would relegate less well-off consumers to digital slow lanes.

Now it is the turn of Ajit Pai (pictured), Mr Wheeler’s successor, to stir the hornets’ nest. In the coming days Mr Pai is expected to unveil a proposal for new rules on net neutrality. His plan is anticipated to be a testament both to his deregulatory agenda and to the big ISPs’ lobbying power. It would essentially take the FCC out of the equation when it comes to policing the smooth running of the internet.

Because of the protests in 2014 and because of a court decision that year suggesting that the FCC needed the jurisdiction to be able to mandate net-neutrality...Continue reading

Categories: FINANCIAL

Fast-food chains in Japan

THE ECONOMIST - Thu, 04/20/2017 - 10:49

Three-star service

SHIMMERING spreads of raw fish sashimi, succulent beef from massaged cows, and, for a decade, the capital with the most Michelin-starred restaurants: few nations rival Japan for fine dining. Its fast-food scene has also thrived for centuries. From the 1700s bowls of cold soba noodles, made from buckwheat, were cycled to wealthy clients on towering trays. Sushi began to glide past customers in 1958, when the first conveyor belt was installed. In 1970 its first homegrown hamburger chain opened, a year before McDonald’s entered the market.

Fast-food chains continued to be a rare bright spot for Japan during its two-decade-long economic slump. Since 2008 the size of the market has increased from $35bn to $45bn (those figures include convenience stores, or konbini); that of restaurants has declined every year in that period. But fast food is now being squeezed: by a combination of higher wages and still-tepid consumption, and by foreign rivals winning over more Japanese stomachs.

Tomoaki Ikeda, president of Yudetaro, a soba chain in the greater Tokyo...Continue reading

Categories: FINANCIAL

AkzoNobel makes unrealistic promises about growth

THE ECONOMIST - Thu, 04/20/2017 - 10:49

THE future for AkzoNobel is dazzling—if you believe Ton Büchner, its chief executive. The boss of the Dutch paint-and-coatings firm reported a solid set of quarterly earnings on April 19th, then promised a new era of rapid growth and investments. Shareholders are to get lavish dividends this year. The firm will break up its ungainly conglomerate structure. A speciality-chemicals part of the business will be sold or listed separately next year.

Mr Büchner has no choice but to talk things up, if he is to justify rebuffing two recent takeover offers from a similar-sized American rival, PPG. Its latest bid, of €22.5bn ($24bn) in cash and shares, represented a 40% premium over Akzo’s market value before the first bid. An activist fund, Elliott Management, which has a 3% stake in Akzo, is pushing other shareholders to demand discussion of the bid.

Akzo’s promises were welcome. But like a newly opened tin of paint, they made some heads spin. After years of eking out smallish gains mostly through cost-cutting, the firm is suddenly to boom. Akzo had previously forecast that returns on sales would be 11% by 2018, already well over its average of less than 9%...Continue reading

Categories: FINANCIAL

How Donald Trump affects America’s tourist business

THE ECONOMIST - Thu, 04/20/2017 - 10:49

TRUMP Tower, in midtown Manhattan, has become a modern-day Mount Vernon. Tourists have long visited George Washington’s homestead. Now they venture through Trump Tower’s brass doors to ogle the decor—“it’s so gold,” said a German teenager standing near the lobby’s waterfall on a recent afternoon—or buy souvenirs. The Choi family, visiting from South Korea, wandered the marble expanse with their new “Make America Great” hats (three for $50).

The question for America’s hoteliers and airlines is whether such visitors are just anomalies. A strong dollar is one reason for foreigners to avoid visiting America. Donald Trump may prove another, suggests a growing collection of data. Yet measuring the precise impact of Mr Trump’s presidency on travel is difficult. In addition to the currency effect, many trips currently being taken to America were booked before his election. Marriott, a big hotel company, reported an overall increase, compared with a year earlier, in foreign bookings in America in February.

But Arne Sorenson, Marriott’s boss, has voiced concern about a potential slump in tourism. In February, ForwardKeys, a travel-data...Continue reading

Categories: FINANCIAL

Managing financial risk on London’s massive Crossrail project

THE ECONOMIST - Thu, 04/20/2017 - 10:49

THE eastbound platform on the Elizabeth line at Farringdon Station in central London is 30 metres below ground. Its length is as striking as its depth. At more than 200 metres, it is almost twice as long as the typical platform on the Tube. When service begins in December 2018, it will increase rail capacity in central London by 10%, thanks to the longer trains. Travellers nearest to the terminal stations at Reading and Heathrow, to the west of the city, and Shenfield and Abbey Wood, to the east, have a shot at the acme of commuter luxury: a seat.

Crossrail, as the £14.8bn ($19bn) infrastructure project is known, is on track to deliver other small miracles. With 85% of the work completed, the project is on-budget and on-time, in spite of its size and complexity. The programme required ten new stations, some with passenger tunnels linking them to existing Tube lines. The Elizabeth line itself will snake through 13 miles (21km) of twinned tunnels, including a section under the Thames. Tunnelling is a risky business. You never can tell if you’ll run into a hold-up. The Crossrail dig has yielded 10,000 items of interest to archaeologists. At Farringdon the diggers found 25...Continue reading

Categories: FINANCIAL

Why the decline in the number of listed American firms matters

THE ECONOMIST - Thu, 04/20/2017 - 10:49

LAST month Schumpeter attended an event at the New York Stock Exchange held in honour of Brian Chesky, the co-founder of Airbnb, a room-sharing website that private investors value at $31bn. Glittering tables were laid out not far from where George Washington was inaugurated in 1789. The well-heeled members of the Economic Club of New York watched as Thomas Farley, the NYSE’s president, hailed Airbnb as an exemplar of American enterprise. Mr Chesky recounted his journey from sleeping on couches in San Francisco to being a billionaire. His mum, a former social worker, looked on. Only one thing was missing. When Mr Chesky was asked if he would list Airbnb on the NYSE, he hesitated. He said there was no pressing need.

Airbnb is not alone. A big trend in American business is the collapse in the number of listed companies. There were 7,322 in 1996; today there are 3,671. It is important not to confuse this with a shrinking of the stockmarket: the value of listed firms has risen from 105% of GDP in 1996 to 136% now. But a smaller number of older, bigger firms dominate bourses. The average listed firm has a lifespan of 18 years, up from 12 years two decades ago, and is worth four times...Continue reading

Categories: FINANCIAL

The IMF nudges up its forecast for global growth

THE ECONOMIST - Thu, 04/20/2017 - 10:49

APRIL is the cruellest month, breeding lilacs out of the dead land, and, in Washington, chirpy forecasts from the IMF that often prove a bit too chirpy. On April 18th the fund released its semi-annual World Economic Outlook (WEO), raising its forecast for global growth in 2017 to 3.5%.

Growth forecasts for the emerging world have not changed. The IMF’s global optimism is based instead on hopes of increased growth in the rich world. The fund takes a rosy view of the American economy, citing both high levels of consumer confidence and Donald Trump’s plans for more government spending. In Britain the IMF now reckons GDP will grow by 2.0% in 2017, up from earlier estimates of 1.5% (issued in January) and 1.1% (last October). The IMF has also raised its forecasts for Japan and the euro area.

Snipers point out that IMF forecasts have been far from perfect. Some glitches are excusable. In the spring of 1990, it predicted that Kuwait’s economy would grow by 0.8% that year. It actually fell by 26%. The IMF’s model did not allow for an Iraqi invasion. But other errors are less easily explained: between 1990 and 2007, the IMF’s spring forecasts...Continue reading

Categories: FINANCIAL

How and when to use private money in infrastructure projects

THE ECONOMIST - Thu, 04/20/2017 - 10:49

WHEN the Indiana Toll Road was opened in 1956, there were eight pairs of travel plazas, or rest stops, along the 156-mile (250km) stretch linking Chicago to Ohio and points eastward. As cars became faster and less thirsty, travellers had less reason to stop regularly for petrol or snacks. Three of the travel plazas closed in the 1970s. Restaurants shuttered, even if offered free rent. The remaining plazas, dwindling in number, fell into disrepair. The abiding memory some road users had of Indiana was of grubby toilets along the toll road.

Those rest-stops are at last getting a makeover. IFM, an Australian infrastructure fund, is investing $34m in the toll-road’s plazas, part of a $200m-plus upgrade. Half of the road’s length, with 57 bridges, is being resurfaced, using a treatment known as “crack-and-feed”, which lasts longer than simply patching the top. IFM, which acquired a 66-year lease on the road in a $5.8bn deal in 2015, says a private-sector operator has the right incentives to invest for the long term. Fewer tyre blowouts mean less gridlock, more road users and more revenue.

Politicians across the spectrum agree on the need to upgrade America’s...Continue reading

Categories: FINANCIAL

New types of driver embrace the recreational vehicle

THE ECONOMIST - Thu, 04/20/2017 - 10:49

EARLY spring is the main selling season for recreational vehicles (RVs) and the phone on Tom Troiano’s desk has been ringing incessantly. The owner of Continental RV, a dealership in Farmingdale, a village on Long Island, Mr Troiano is on track to sell more RVs this year than in any other since the early 2000s. Buoyed by cheap financing, rising wages and inexpensive gas, travellers are once again splurging on big-ticket camper vans.

RVs are a quintessentially American invention: more than two-thirds are made in the United States. Nationally, sales surged to 430,000 units last year, a 40-year high. At the inexpensive end they sell for as little as $5,000 for a caravan; deluxe versions cost up to $1m and are typically equipped with a bedroom, kitchen and bathroom that are bigger than in many European flats. The share prices of Thor Industries, the biggest RV-manufacturer in America, and Winnebago, the third-largest, have risen by 43% and 17%, respectively, in the past year.

That is a big change. During the 2008-09 recession, notes Mr Troiano, RV dealerships everywhere closed down, leaving his shop among the very few left serving the New York metropolitan area....Continue reading

Categories: FINANCIAL

Digitisation shakes up corporate-bond markets

THE ECONOMIST - Thu, 04/20/2017 - 10:49

JUST a few decades ago, an asset manager wanting to trade shares, bonds or derivatives almost always had to call up the trading desk at a big investment bank. Today shares and many derivatives can be traded with a few simple clicks (or even in fully automated fashion, using algorithms). But buying and selling bonds, especially corporate bonds, is still an old-fashioned business. Over four-fifths of trading in American corporate bonds still takes place with a dealer, usually over the phone. Yet digitisation is at last beginning to change the structure of bond markets: witness the announcement on April 11th by Tradeweb, an electronic-trading platform, that it is to offer “all-to-all” trading in European corporate bonds, ie, a system in which any market participant can trade with any other.

Electronic bond-trading is not in itself new. Tradeweb’s platform, initially limited to trading of American Treasuries, was unveiled in 1998. Around half of Treasuries, and nearly 60% of European government bonds, are now traded electronically, reckons Greenwich Associates, a consultancy. But for corporate bonds, progress has been slower: only 25% of global trading volume in...Continue reading

Categories: FINANCIAL

Volunteer Bancorp in Tennessee considering selling itself

AMERICAN BANKER - Thu, 04/20/2017 - 10:34
The company has hired an investment bank to help it consider strategic alternatives, which could also include recapitalizing.
Categories: FINANCIAL

Regulators' silence on new HMDA rule is deafening

AMERICAN BANKER - Thu, 04/20/2017 - 10:34
Upcoming changes to how banks report mortgage activity to the government will have an undeniable impact on Community Reinvestment Act exams, but regulators have been silent on how they will use the data.
Categories: FINANCIAL

KeyCorp reaps benefits of First Niagara deal

AMERICAN BANKER - Thu, 04/20/2017 - 10:02
Despite merger-related charges, the Cleveland bank's first-quarter profit climbed 63% as the addition of a million new customers led to strong gains in both interest and fee income.
Categories: FINANCIAL

Citizens Financial profits rise on wider margins, higher fee income

AMERICAN BANKER - Thu, 04/20/2017 - 09:30
First-quarter earnings at the Providence, R.I., company jumped 45% thanks partly to improvements in its net interest margin, 7% loan growth and stronger card and other noninterest income.
Categories: FINANCIAL

Amex beats estimates; OCC blames itself on Wells

AMERICAN BANKER - Thu, 04/20/2017 - 09:14
The card company reported flat billed business following two down quarters despite loss of Costco co-branded business; bank regulator faults its examiners for ignoring Wells Fargo problems as far back as 2010.
Categories: FINANCIAL

BB&T accepts short-term earnings hit for higher profit in coming quarters

AMERICAN BANKER - Thu, 04/20/2017 - 08:58
The North Carolina company reported lower net income from a year earlier after extinguishing nearly $3 billion in FHLB advances. BB&T also reported more regulatory charges as it deals with a consent order.
Categories: FINANCIAL

Market rally, rate hikes combine to boost BNY Mellon’s 1Q profit

AMERICAN BANKER - Thu, 04/20/2017 - 08:58
The custody bank also won $109 billion worth of new asset-servicing business in the quarter, which pushed assets under custody to over $30 trillion.
Categories: FINANCIAL

Signature Bank seeks more C&I loans to take advantage of rising rates

AMERICAN BANKER - Wed, 04/19/2017 - 18:12
The New York bank has rapidly expanded its commercial real estate lending over the last several years, but now it is ready to slow down a bit and add more commercial and industrial loans to the mix.
Categories: FINANCIAL

Energy sector rebound fuels 1Q profit rise at Texas Capital

AMERICAN BANKER - Wed, 04/19/2017 - 17:56
Texas Capital Bancshares sharply reduced the size of its loan-loss provision as credit quality improved in its energy loan book. That helped the Dallas bank post a 77% rise in first-quarter profit.
Categories: FINANCIAL

BancorpSouth reports higher profit on loan growth, expense control

AMERICAN BANKER - Wed, 04/19/2017 - 17:08
The Mississippi company's first-quarter earnings rose 60% from a year earlier. Its results from last year were weighed down by a settlement with regulators.
Categories: FINANCIAL

American Express revenue beats estimates after marketing push

AMERICAN BANKER - Wed, 04/19/2017 - 17:08
American Express Co. reported revenue that beat analysts’ estimates after a marketing campaign showed signs of encouraging more card spending after the loss of key partnerships.
Categories: FINANCIAL

Wells Fargo CEO: Ousting most of board would be 'crazy'

AMERICAN BANKER - Wed, 04/19/2017 - 17:08
Tim Sloan just survived his biggest test yet, when a board investigation found he wasn't to blame for the bank's notorious account scandal. But his next is just days away: Persuading investors not to expel much of the board.
Categories: FINANCIAL

House panel to hold hearing on Dodd-Frank overhaul plan next week

AMERICAN BANKER - Wed, 04/19/2017 - 17:08
The House GOP has signaled that it is ready to move forward on its Dodd-Frank Act replacement plan.
Categories: FINANCIAL

OCC missed several chances to spot, fix Wells Fargo sham accounts

AMERICAN BANKER - Wed, 04/19/2017 - 16:52
An internal agency report paints a scathing portrait of the OCC, acknowledging that it missed several red flags on the Wells Fargo matter.
Categories: FINANCIAL

Defying predictions, credit quality keeps improving at many banks

AMERICAN BANKER - Wed, 04/19/2017 - 16:20
Huntington, Wintrust and Eagle reported extremely low quarterly chargeoff ratios, and their CEOs say they remain confident about the future. But, as one observer says, "ultimately some sector is going to get overextended."
Categories: FINANCIAL

Debt to the Penny for 04/18/2017

Debt Held by the Public: 14,324,046,743,134.43
Intragovernmental Holdings: 5,522,059,443,056.01
Total Public Debt Outstanding: 19,846,106,186,190.44

How is ATM fraud still a thing?

AMERICAN BANKER - Wed, 04/19/2017 - 14:28
Attacks on ATMs and point-of-sale machines are getting more sophisticated and frequent. Crooks are trying to get as much use as they can out of their skimming devices before the migration to chip cards is complete.
Categories: FINANCIAL

U.S. Bancorp's Cecere grilled on costs, auto risk in first call as CEO

AMERICAN BANKER - Wed, 04/19/2017 - 13:40
New boss Andy Cecere's first year on the job will likely be defined by how he tackles the challenges in front of him, including keeping the company’s highly watched efficiency ratio in check and managing pitfalls in auto-lease financing.
Categories: FINANCIAL

Robo-adviser will allow well-heeled clients to borrow against their savings

AMERICAN BANKER - Wed, 04/19/2017 - 13:08
Wealthfront is the first of the tech-powered financial advisers to offer securities-based lending. It will compete with the likes of Wells Fargo and Morgan Stanley.
Categories: FINANCIAL

JPMorgan to sell $6.9 billion of student loans to Navient

AMERICAN BANKER - Wed, 04/19/2017 - 12:02
JPMorgan Chase agreed to sell a $6.9 billion portfolio of student loans to Navient Corp., five days after the bank told shareholders it was looking to unload the holdings.
Categories: FINANCIAL

Should banks be criminally liable for not reporting fishy emails?

AMERICAN BANKER - Wed, 04/19/2017 - 11:46
Unlike other “suspicious activity report” categories, a new proposal to add a “cyber-event” category would requires institutions to detect and report digital mischief whether directed at a customer’s account or the bank itself.
Categories: FINANCIAL

Lenders' favorite SBA success stories

AMERICAN BANKER - Wed, 04/19/2017 - 11:14
With National Small Business Week set to kick off April 30, American Banker asked several prominent lenders to share their favorite success stories.
Categories: FINANCIAL

Huntington reports higher profit as it taps into FirstMerit deal

AMERICAN BANKER - Wed, 04/19/2017 - 10:26
The Ohio company said it is retaining more FirstMerit deposit accounts than it had projected. At the same time, Huntington is moving forward with cost-cutting tied to the acquisition.
Categories: FINANCIAL

Signature in N.Y. rides strong asset growth to record profits in 1Q

AMERICAN BANKER - Wed, 04/19/2017 - 10:10
Double-digit growth in earning assets more than offset higher expenses and a decline in the net interest margin.
Categories: FINANCIAL

Higher fee income, loan growth drove U.S. Bancorp's 1Q

AMERICAN BANKER - Wed, 04/19/2017 - 09:54
The Minneapolis company reported higher quarterly earnings thanks to strong performance in credit cards, investment management and other fee-based business lines.
Categories: FINANCIAL

Markets cheer Turkey’s referendum result

THE ECONOMIST - Wed, 04/19/2017 - 09:40

THE VICTORY of Recep Tayyip Erdogan, Turkey’s president, in a referendum on April 16th is seen by many observers as a worrying step on the road to autocracy. The vote handed Mr Erdogan far-reaching new powers. But the Turkish lira, government bonds and stockmarket all gained ground as the results came in.

It was a reminder that the relationship between markets and democracy is not rock-solid. Like an errant husband, investors may proclaim their fidelity to democracy but are not averse to seeing someone else on the side.

In Turkey, investors may have feared turmoil if Mr Erdogan’s proposal had been defeated. It is an old, but fairly reliable, cliché that investors dislike uncertainty. And the early years of Mr Erdogan’s rule saw rapid economic growth; since he took office, the Istanbul market has gained 760% (see chart).

An authoritarian government can provide certainty, at least in the short term. When Mussolini took power in Italy in...Continue reading

Categories: FINANCIAL

Legislative challenge to prepaid rule is an affront to consumers

AMERICAN BANKER - Wed, 04/19/2017 - 09:38
Prepaid card users have waited a long time for the basic protections that debit card customers take for granted. Congress should not throw them under the bus.
Categories: FINANCIAL

Higher rates a mixed blessing for Wintrust in first quarter

AMERICAN BANKER - Wed, 04/19/2017 - 09:22
Wintrust’s mortgage revenues fell in the first quarter, but net interest income picked up the slack.
Categories: FINANCIAL

Goldman disappoints; Big day for digital wallets

AMERICAN BANKER - Wed, 04/19/2017 - 08:50
The bank's first-quarter results take some of the steam out of the Trump bank rally; Mastercard to put Masterpass on Facebook Messenger while PayPal reaches deal with Android Pay.
Categories: FINANCIAL

The markets adjust their Brexit calculations

THE ECONOMIST - Wed, 04/19/2017 - 06:41

SOMETIMES the markets are genuinely surprised. On the morning of April 18th, news that the British prime minister was to make an announcement at 11.15am caused the pound to dip. What could the news be? Retirement due to ill-health? Several pundits went on Twitter to proclaim their belief that it would not be an early election; after all, Theresa May, the prime minister, has said repeatedly that the poll would not occur until 2020. But the news was indeed that an election will happen on June 8th. The pound then stormed higher and is now more than $1.28, around its strongest level this year (but well below the $1.50 touched on the day of the Brexit referendum).

So what explains the switcharound? The hope is that the election will lead to a softer Brexit result and thus be better news for the British economy. Deutsche Bank, previously bearish on sterling, was the most prominent convert to this view.

First, it makes the deadline to deliver a "clean" Brexit, without a lengthy transitional arrangement, by 2019 far less pressing given that no general election will be due the year after. Second, it will dilute the influence of MPs pushing for hard Brexit, strengthening the government's...Continue reading

Categories: FINANCIAL

Remaining cautious on energy credits at Hancock Holding

AMERICAN BANKER - Tue, 04/18/2017 - 20:50
The Mississippi company reported loan growth but a dip in profits after a first-quarter acquisition, and it warned that it is on alert for any new “lag” in the energy sector.
Categories: FINANCIAL

Mortgage income provides boost to Fulton Financial's quarterly results

AMERICAN BANKER - Tue, 04/18/2017 - 18:42
Loan growth and increased fee income helped offset slightly higher expenses in the first quarter.
Categories: FINANCIAL

Lawmakers push for tougher disclosures on energy loans

AMERICAN BANKER - Tue, 04/18/2017 - 17:22
Lawmakers from both political parties are increasingly interested in forcing lenders who offer loans to upgrade home heating and cooling systems to issue better disclosures, a prospect that has some in the industry nervous.
Categories: FINANCIAL

Rise in consumer loans soothes the pain of a C&I slowdown

AMERICAN BANKER - Tue, 04/18/2017 - 17:22
The hand-wringing over business lending has overshadowed the fact that consumer lending — particularly for regional banks — has become a strong and steady engine of growth.
Categories: FINANCIAL

Debt to the Penny for 04/17/2017

Debt Held by the Public: 14,330,766,160,568.75
Intragovernmental Holdings: 5,515,381,524,042.37
Total Public Debt Outstanding: 19,846,147,684,611.12

Why B of A's Moynihan is confident about bank lending

AMERICAN BANKER - Tue, 04/18/2017 - 14:52
Bank of America's year-over-year loan growth was slow, but parts of its commercial and U.S. consumer businesses were strong, prompting optimism from the CEO in the face of lackluster numbers across banking so far this earnings season.
Categories: FINANCIAL

FSOC is too political to be taken seriously

AMERICAN BANKER - Tue, 04/18/2017 - 14:35
The Financial Stability Oversight Council is masquerading as an analytical, objective body that more accurately reflects the Dodd-Frank Act’s aim to expand the power of bureaucrats.
Categories: FINANCIAL

Supreme Court sends mixed signals in debt servicing case

AMERICAN BANKER - Tue, 04/18/2017 - 14:20
Justices on the Supreme Court appeared exasperated with both sides for a case that would define whether companies that buy distressed debt are covered under a federal statute setting limits on their activities.
Categories: FINANCIAL

Here's one fintech that's still going head-to-head against banks

AMERICAN BANKER - Tue, 04/18/2017 - 14:04
For all the talk of co-optation and partnerships with banks, financial services startups are doing well in underserved niche markets such as actors and musicians.
Categories: FINANCIAL

Banks and Thrifts with the Largest Portfolios of Mortgage-Backed Securities

AMERICAN BANKER - Tue, 04/18/2017 - 13:16
On Dec. 31, 2016. Dollars in thousands.
Categories: FINANCIAL

State regulators harmonize quarterly reporting for MSBs

AMERICAN BANKER - Tue, 04/18/2017 - 12:28
The Conference of State Bank Supervisors announced a raft of measures Tuesday designed to simplify multistate licensing and regulatory oversight for fintechs and other companies registered as money-services businesses.
Categories: FINANCIAL

Best bet for single-family construction loans is smaller banks, study suggests

AMERICAN BANKER - Tue, 04/18/2017 - 12:12
Home builders looking for single-family construction loans may have better luck with small and mid-sized banks than larger institutions, according to a recent report by the National Association of Home Builders.
Categories: FINANCIAL

Banks and Thrifts with the Largest Securities Portfolios

AMERICAN BANKER - Tue, 04/18/2017 - 12:12
On Dec. 31, 2016. Dollars in thousands.
Categories: FINANCIAL

New York may require Uber to provide an option to leave a tip

THE ECONOMIST - Tue, 04/18/2017 - 12:06

UBER has many virtues. The ride-hailing app has disrupted the cosy taxi cartels that care little for customers; it has made travel around cities cheaper, more convenient and reliable; and it has called into question the notion that taxi drivers must be tipped simply for doing their job. Sadly, a proposal in New York might pose a serious threat to the last of these qualities.

Currently, Uber’s smartphone app, which charges users automatically at the end of a journey, does not give the option of adding a tip. But Uber drivers in New York are petitioning officials to force the firm to change this. The chance to add a tip is already standard among many of the firm's competitors, including Lyft. The city's Taxi and Limousine Commission is hoping to write this approach into law. It will put forward a formal proposal in July.

Any such change in the rules would be a step back. The New York Times writes that there has “long been confusion” whether or not customers are supposed to tip Uber...Continue reading

Categories: FINANCIAL

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