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☆ Analysis: U.S. bank loan plan provides Fed rate hike path amid SVB fallout
▼ + stars: | 2023-03-14 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +5 min

Banks can use eligible government securities on their books like Treasuries and agency mortgage backed-debt to guarantee the loans. By comparison, a one-year loan from a Federal Home Loan Bank, a government state enterprise that provides low-cost lending to regional banks, is around 5.4%, according to market participants. In essence, the bank lending program will allow the Fed to keep raising rates." U.S. banks had raised their holdings of government securities during periods of ultra-low interest rates to defend falling interest net margins. Major banks led by Goldman Sachs (GS.N) and Barclays Bank (BARC.L) have called for a pause from the Fed next week.

There's a big shift in rate expectations," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. Goldman Sachs (GS.N), among other big banks, said it no longer expects the Fed to deliver a rate hike at the end of its two-day policy meeting on March 22. "There's been a radical change in interest rate expectations and in that scenario the dollar has weakened," said Niles Christensen, chief analyst at Nordea. The Japanese yen strengthened 1.47% at 133.04 per dollar, while the dollar fell 1.23% against the Swiss franc at 0.910. Earlier, it hit a near one-month high of $1.0737, ahead of the European Central Bank's policy meeting on Thursday.

☆ UK races to minimise SVB fallout amid reports of potential buyers
▼ + stars: | 2023-03-12 | by ( Andrew Macaskill | ) www.reuters.com time to read: +6 min

[1/2] A notice hangs on the door of Silicon Valley Bank (SVB) located in San Francisco, California, U.S. March 10, 2023. SoftBank-owned lender OakNorth Bank is weighing a bid to buy Silicon Valley Bank UK Ltd, a person with knowledge of the talks told Reuters, confirming a Sky News report. EXISTENTIAL THREATMore than 250 UK tech firm executives signed a letter addressed to Hunt on Saturday calling for government intervention and warned of an "existential threat" to the UK tech sector, a copy seen by Reuters shows. Hunt reiterated comments by the BoE that overall, Silicon Valley Bank had a limited presence in Britain and did not perform functions critical to the financial system. Sunak has said he wants to turn Britain into the "next Silicon Valley".

The pan-European STOXX 600 index (.STOXX) fell 1.7% on broad-based losses, with HSBC (HSBA.L), Deutsche Bank (DBKGn.DE), Barclays (BARC.L), Unicredit (CRDI.MI) and Commerzbank (CBKG.DE) down between 2.7% and 7.2%. If it can happen to a U.S. bank, it could potentially happen to a bank in Europe as well." Next week, the focus is likely to be on the European Central Bank which is expected to hike its key lending rate by 50 bps. Daimler Truck (DTGGe.DE) added 3.5% on dividend payment plans after hitting its 2022 targets and forecasting higher earnings and revenue this year. Reporting by Susan Mathew and Medha Singh in Bengaluru; Editing by Subhranshu Sahu and Dhanya Ann ThoppilOur Standards: The Thomson Reuters Trust Principles.

UK banks (.FTNMX301010) dropped to an eight-week low, spooked by a brutal rout in U.S. bank SVB Financial (SIVB.O) following a share sale. The FTSE 100 (.FTSE) slipped 1.9% to a five week low, while the more domestically focused mid-cap index (.FTMC) gave up 2.1% to hit a two-month low. The FTSE 100 is set to the end the week down about 2.8% in what could be its worst week since September, as worries around hawkish central banks sapped risk appetite. Next week, investors will be watching for UK Chancellor Jeremy Hunt's spring budget. Reporting by Susan Mathew in Bengaluru; Editing by Savio D'Souza and Saumyadeb ChakrabartyOur Standards: The Thomson Reuters Trust Principles.

☆ Jamie Dimon throws Jes Staley off the battlements
▼ + stars: | 2023-03-09 | by ( Neil Unmack | ) www.reuters.com time to read: +4 min

Suing former employees – in this case using an archaic-sounding doctrine that brands Staley a “faithless servant” – isn't a great look, but the bank led by Jamie Dimon has more reasons than most to defend itself. His $400 billion firm is being pursued for unspecified damages by a woman who argues that it knew of Epstein’s sex trafficking venture, and is also being sued by the government of the U.S. Virgin Islands. If JPMorgan loses either of the lawsuits in which it is a defendant, it wants Staley to share in the damages. Current or future employees might worry they too could find themselves branded a faithless servant for failing to disclose moral missteps, or having clients who fall from grace. CONTEXT NEWSJPMorgan on March 8 filed a complaint against former executive James “Jes” Staley, for not disclosing his relations with former client and sex offender Jeffrey Epstein.

The Wall Street bank also wants Staley to repay all compensation from 2006 to 2013. Staley has acknowledged having been friendly with Epstein, but expressed regret for their relationship and denied knowing about the financier's alleged crimes. Epstein killed himself in a Manhattan jail cell in August 2019 while awaiting trial on sex trafficking charges. Staley resigned as Barclays' chief executive in November 2021 amid a dispute with British financial regulators examining his ties to Epstein. The cases are JPMorgan Chase Bank NA v Staley, U.S. District Court, Southern District of New York, No.

☆ Morning Bid: Job runes, China offer sliver of rate hope
▼ + stars: | 2023-03-09 | by ( ) www.reuters.com time to read: +5 min

That certainly ups the ante for Friday's monthly employment report and next week's consumer price index releases. But the rate at which people were leaving jobs voluntarily was falling and layoffs were up. Another pause for thought came from China's February inflation numbers that show annual consumer price rises slowed to just 1%, the lowest rate in a year. More broadly on Thursday, interest rates markets retained their dramatic re-pricing and relatively resilient stock markets tilted negative again. The implied end-2023 rate is now above 5.50% - more than a full percentage point above where it was assumed on February 1.

☆ Jamie Dimon throws Staley off fortress battlements
▼ + stars: | 2023-03-09 | by ( Neil Unmack | ) www.reuters.com time to read: +4 min

Suing former employees – in this case using an archaic-sounding doctrine that brands Staley a “faithless servant” – isn't a great look, but the bank led by Jamie Dimon has more reasons than most to defend itself. His $400 billion firm is being pursued for unspecified damages by a woman who argues that it knew of Epstein’s sex trafficking venture, and is also being sued by the government of the U.S. Virgin Islands. The bank has delivered a more than 400% total return to shareholders since Dimon took over in 2006, while talking up its “fortress” balance sheet. If JPMorgan loses either of the lawsuits in which it is a defendant, it wants Staley to share in the damages. Current or future employees might worry they too could find themselves branded a faithless servant for failing to disclose moral missteps, or having clients who fall from grace.

Arm is expected to confidentially submit paperwork for its initial public offering in late April, the sources said, speaking on condition of anonymity because the discussions are confidential. The listing is expected to happen later this year and the exact timing will be determined by market conditions, the sources added. SoftBank has picked four investment banks to lead what is expected to be the most high-profile stock market flotation in recent years. The preparations for the IPO are expected to be kick-started in the U.S. in the coming days, the sources said. The valuation range has not yet been finalized but Cambridge, England-based Arm is hoping to be valued at more than $50 billion during its share sale, the sources said.

☆ US Justice Dept warns of steeper penalties for firms that fall foul of messaging policies
▼ + stars: | 2023-03-03 | by ( Chris Prentice | ) www.reuters.com time to read: +3 min

MIAMI, March 3 (Reuters) - Companies may face steeper penalties for misconduct if they lack policies around employees' use of personal cell phones and messaging apps, a top U.S. Justice Department official said on Friday. The agency will evaluate how companies have crafted policies around the use of such platforms and how they have directed employees on those policies. Use of such platforms, including ephemeral messaging apps, can complicate government investigations into wrongdoing if companies do not retain the records. That is an issue that prosecutors will address as they investigate wrongdoing, Polite told Reuters in an interview. "They will be required to report back to us on an annual basis about both the design and implementation of those policies," Polite said.

☆ Barclays CEO Venkat completes treatment for cancer, in remission
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: +1 min

LONDON, March 3 (Reuters) - British bank Barclays (BARC.L) said on Friday that its chief executive C.S. Venkatakrishnan has completed treatment for non-Hodgkin lymphoma, a type of cancer, and is now in remission. "I am pleased to inform you that I have completed the treatment for non-Hodgkin lymphoma that I commenced last November. I am now in remission (no evidence of disease)," Venkatakrishnan told colleagues in a letter, according to a company statement. The CEO, known inside the bank as Venkat, had previously said in November that doctors viewed his prognosis as "excellent" and that he would keep working when possible, while receiving treatment in New York.

☆ US Justice Dept to take on corporate policies for personal devices, messaging apps
▼ + stars: | 2023-03-03 | by ( Chris Prentice | ) www.reuters.com time to read: +1 min

MIAMI, March 3 (Reuters) - A top U.S. Justice Department official on Friday will announce details of the agency's plans to scrutinize companies' policies around employee use of personal devices and messaging apps when investigating potential misconduct. Those probes have led to hefty penalties for firms including JPMorgan Chase & Co , Barclays (BARC.L), Bank of America (BAC.N) and Morgan Stanley (MS.N). The agency has more recently opened similar probes into other firms including BlackRock Inc. Polite will also discuss details of a new Justice Department policy aimed at getting companies to tie compensation and bonuses to compliance. He and other officials have been rolling out a series of new policies aimed at tackling corporate crime and encouraging companies to be more proactive in reporting misconduct to the government.

☆ British lawmakers ramp up pressure on banks over savings rates, exec pay
▼ + stars: | 2023-03-01 | by ( Iain Withers | ) www.reuters.com time to read: +2 min

The Treasury Committee noted profit margins at the four biggest British banks - Lloyds Banking Group (LLOY.L), NatWest (NWG.L), HSBC (HSBA.L) and Barclays (BARC.L) - increased in 2022 earnings published last month, while some also bumped up boardroom pay. The committee has asked the four banks to justify why they offer less than 1% interest on easy access savings accounts, despite the Bank of England benchmark rate rising to 4%. Banks reported robust profits for 2022 in earnings last month, but warned margins could already have peaked as competition steps up. Analysts have questioned whether political pressure could have been a factor in banks outlining cautious guidance on their future earnings potential. Reporting by Iain Withers; editing by Sinead Cruise, Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.

[1/3] Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase & Co., gestures as he speaks during an interview with Reuters in Miami, Florida, U.S., February 8, 2023. Lawyers for the U.S. Virgin Islands did not immediately respond to requests for comment. The U.S. Virgin Islands is seeking damages from JPMorgan for missing red flags about Epstein's misconduct on Little St. James, a private island he owned there. Dimon and Staley, who later served as Barclays Plc's (BARC.L) chief executive, are not defendants in either lawsuit. The case is Government of the U.S. Virgin Islands v JPMorgan Chase Bank NA, U.S. District Court, Southern District of New York, No.

☆ Revisiting JPMorgan’s innovative Cazenove deal
▼ + stars: | 2023-02-24 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +6 min

JPMorgan avoided most of these problems by structuring its deal as a joint venture with Cazenove. Though the corporate entity called JPMorgan Cazenove was quietly wound down a few years ago, the name still graces the U.S. group’s UK banking business. At the time of the JPMorgan deal, Cazenove acted as broker to almost half of the companies in the FTSE 100 Index (.FTSE). By 2009, the enlarged business reported a pre-tax profit of 280 million pounds. The Cazenove deal still stands as a case study of how to buy an investment bank without destroying it.

In a Thursday filing in Manhattan federal court, the U.S. Virgin Islands said JPMorgan's wrongful conduct continued at least until August 2019, when Epstein killed himself. The U.S. Virgin Islands called Dimon "a likely source of relevant and unique information" about decisions to retain Epstein as a client, and discussions on Epstein's referrals of prominent and wealthy potential clients. According to the filing, the business referral relationship continued after Epstein stopped being a client. The U.S. Virgin Islands is suing JPMorgan for unspecified damages, saying the bank should have known about its "high-risk" former client's misconduct on a private island he owned there. The case is Government of the U.S. Virgin Islands v JPMorgan Chase Bank NA, U.S. District Court, Southern District of New York, No.

Instead, despite reporting robust profits, banks' shares have broadly stumbled as they forecast margin pressure, suggesting intensifying competition for customers' deposits and mortage business to come. "It may be that we've seen the peak of margin," said William Chalmers, finance chief of Britain's biggest domestic bank Lloyds (LLOY.L) on Wednesday. Lenders say they have started to pass on higher rates to savers, adding that profitability is rebounding after years of low margins. Pressure to immediately increase the rates banks pay savers has been intensified by the digital offerings from U.S. entrants into the market such as JPMorgan and Goldman Sachs, executives at the top British lenders said. In contrast to floating rates, which broadly track the Bank of England benchmark, fixed mortgage rates have started to fall as competition intensifies.

☆ JPMorgan says it is not liable for top banker's ties to Jeffrey Epstein
▼ + stars: | 2023-02-23 | by ( Jonathan Stempel | ) www.reuters.com time to read: +2 min

Lawyers for the U.S. Virgin Islands did not immediately respond to requests for comment. Epstein killed himself in a Manhattan jail cell in August 2019 while awaiting trial on sex trafficking charges. After leaving JPMorgan, Staley became chief executive of Barclays Plc (BARC.L) but resigned in November 2021 amid a dispute with British financial regulators examining his ties to Epstein. Epstein's victims are also suing JPMorgan and Deutsche Bank AG (DBKGn.DE), where Epstein was a client from 2013 to 2018. The case is Government of the U.S. Virgin Islands v JPMorgan Chase Bank NA, U.S. District Court, Southern District of New York, No.

☆ FTSE 100 falls as ex-dividend trades weigh; Rolls-Royce soars
▼ + stars: | 2023-02-23 | by ( Shashwat Chauhan | ) www.reuters.com time to read: +2 min

SummarySummary Companies Rolls-Royce jumps on upbeat forecastMajor banks and healthcare stocks trade ex-divFTSE 100 down 0.3%, FTSE 250 adds 1.0%Feb 23 (Reuters) - The FTSE 100 index fell on Thursday, as banking and healthcare majors traded ex-dividend, although a surge in Rolls-Royce after it reported higher profit limited further losses. The blue-chip FTSE 100 (.FTSE) was down 0.3%, on track for its third straight session of decline. Some banks, including Barclays (BARC.L) and Standard Chartered (STAN.L), and healthcare majors AstraZeneca (AZN.L) and GSK (GSK.L) traded without entitlement for dividend payout. The exporter-heavy FTSE 100 has had a strong start to the year, helped by some positive earnings and a stir in commodity prices, hitting record highs and breaching the 8,000 barrier level. Among individual stocks, Mondi (MNDI.L) hit the bottom of the FTSE 100, falling 6.7% after reporting its full-year results.

☆ AT&T seeks to shed cybersecurity division -sources
▼ + stars: | 2023-02-21 | by ( Milana Vinn | ) www.reuters.com time to read: +2 min

NEW YORK, Feb 21 (Reuters) - AT&T Inc (T.N), the second-biggest U.S. wireless carrier, is exploring a sale of its cybersecurity division, potentially undoing an acquisition it completed five years ago, according to people familiar with the matter. The sale of the cybersecurity business would add to a string of divestments AT&T has turned to in order to pay down debt following its $108.7 billion acquisition of Time Warner Inc in 2018, a deal it has since also unwound. AT&T has been working with Barclays Plc (BARC.L) to solicit potential bids for its cybersecurity business, which was called Alienvault when it was acquired in 2018 in a roughly $600 million deal, the sources said. The sources cautioned that no deal is certain and requested anonymity because the matter is confidential. AT&T's cybersecurity division helps small-to-medium-sized businesses keep their information technology networks, including laptops, desktops, servers and mobile devices, secure.

☆ U.S. IPO pick-up offers hope of market re-open
▼ + stars: | 2023-02-20 | by ( Echo Wang | ) www.reuters.com time to read: +3 min

A year after Russia's invasion of Ukraine and an inflation rally fueled a bout of market volatility that prevented most initial public offerings in 2022, last week saw a flurry of listings. In total, the IPOs raised about $1.17 billion in proceeds, up sixfold from the previous week when stock market debuts raised about $193 million, according to Dealogic. We see this as step one in a broader IPO market recovery, with some of the stronger sectors leading the early supply," said Rob Stowe, co-head of Americas equity capital markets at Barclays Plc (BARC.L). Some companies are waiting for a sustained IPO recovery before deciding to pull the trigger for their debut, some of the advisers said. That will likely take at least until the summer if the market recovery continues, they added.

TOUGH TASK AHEADStanChart, which makes most of its profit in Asia, reported statutory pretax profit of $4.3 billion for 2022. That came below the $4.73 billion average of analyst forecasts compiled by the bank but beat the $3.35 billion it made in 2021. On Wednesday, Barclays (BARC.L) reported a 14% fall in full-year pretax profit as earnings were pole-axed by surging costs and a collapse in deal fees, among other factors. StanChart's financial markets trading business reported record income, up 21%, as accelerating inflation and Russia's invasion of Ukraine made for volatile markets, driving frenzied activity by institutional clients throughout 2022. StanChart also took a $308 million hit on its investment in China Bohai Bank (9668.HK), which it attributed to "industry challenges".

Say hi to Snow White," Staley emailed Epstein in July 2010, according to filings on Wednesday with the U.S. District Court in Manhattan. "Beauty and the Beast," Staley allegedly responded, to which Epstein replied: "Well one side is available," according to the filing. According to the lawsuit, Staley exchanged around 1,200 emails with Epstein from his JPMorgan email account between 2008 and 2012. Staley allegedly wrote to Epstein on Nov 1, 2009, describing his relationship with Epstein as "profound". One month later, Staley allegedly wrote to Epstein to say how great it had been to give him "a long, heartfelt hug", after which Epstein allegedly sent Staley two pictures of young women.

☆ Barclays docks execs' pay by 1 million pounds over regulatory failures
▼ + stars: | 2023-02-15 | by ( ) www.reuters.com time to read: +1 min

LONDON, Feb 15 (Reuters) - Barclays (BARC.L) has docked the pay of some top executives by a combined 1 million pounds ($1.2 million) in 2022, following regulatory misteps and a costly overissuance of billions of dollars worth of investment products in the United States. The British bank said in its annual report that it had cut the 2022 bonus for Chief Executive C.S. Venkatakrishnan by 403,000 pounds, while Finance Chief Anna Cross saw her compensation docked by 166,000 pounds. Some long term awards had also been clawed back from former executives, including those earned by ex-finance chief Tushar Morzaria, the bank said. Venkatakrishnan's total pay package for the year was 5.2 million pounds, which the bank said could rise to a maximum 9.7 million pounds if long-term awards were paid out in full.

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