Latest banking news, Nov. 23, 2022

M&T Bank backs Pennsylvania revitalization initiative

M&T Bank has joined a statewide economic development initiative in Pennsylvania to help revitalize underserved communities. The Buffalo, New York, bank committed $1.2 million to 42 projects throughout Pennsylvania, a market where M&T operates 271 branch and ATM locations, as part of Gov. Tom Wolf's recently approved $36 million Neighborhood Assistance Program. Most of the funding is earmarked for projects in the state's central and southeast regions including an affordable housing initiative in West Philadelphia, a bilingual community-based workforce empowerment center in the city of Lebanon and a small business development program in Kutztown. M&T's commitment comes after the bank announced a five-year, $43 billion community reinvestment plan last October as part of its acquisition of People's United Bank in Bridgeport, Connecticut. — Jordan Stutts

Fintech's deal for Seattle bank hits a snag

Luvleen Sidhu.

BM Technologies said its deal to acquire First Sound Bank in Seattle will not close this year as planned. When the Radnor, Pennsylvania, financial technology company announced the $23 million agreement to buy the $154 million-asset First Sound in November of 2021, it projected a closing in the second half of this year. But because of heightened regulatory scrutiny, it "is working to resubmit its merger application" and to "respond to questions posed by regulators, with a goal of closing in 2023." "We are committed to combining with a bank and improving our revenues," BM Technologies Chief Executive Luvleen Sidhu said in a press release. — Jim Dobbs

Credit Suisse’s fund outflows are concerning, JPMorgan says

A sign hangs above the entrance to a Credit Suisse office building in Bern, Switzerland.

Credit Suisse Group's outlook flagging a fourth-quarter loss, and the ongoing outflows in its wealth management business are "concerning," say analysts at JPMorgan Chase. The Swiss bank warned it will book a loss of up to 1.5 billion Swiss francs ($1.6 billion) this quarter, and reported further outflows of wealth management funds amid a slump in client confidence, sending its shares 5% lower toward fresh lows. The bank "is not out of the woods yet in terms of stabilizing the franchise," write analysts led by Kian Abouhossein. He said he was "perplexed" by the material losses in its investment banking division. JPMorgan has a neutral rating on the stock. Credit Suisse is undergoing a sweeping overhaul that will see its investment bank carved up and greater focus placed on private banking, after years of scandals and management missteps. Echoing JPMorgan's view, Vontobel's analyst Andreas Venditti says "the massive net outflows in wealth management, CS's core business alongside the Swiss bank, are deeply concerning — even more so as they have not yet reversed." The lender said that as of Nov. 11, net asset outflows were about 6% of the assets under management at the end of the third quarter. That's equivalent to approximately 84 billion Swiss francs in outflows across wealth and asset management. — Macarena Muñoz and Allegra Catelli, Bloomberg News, with assistance from Thyagaraju Adinarayan.

Morgan Stanley international head Petitgas to step down

Victor J. Blue/Bloomberg

Longtime Morgan Stanley executive Franck Petitgas is stepping down after a 30-year run at the bank. Petitgas, 61, has held roles leading its investment-banking division as well as most recently at the helm of its international unit. He will remain a senior adviser, according to a memo seen by Bloomberg. At one point, Petitgas was in the running to be a successor to CEO James Gorman. The bank's subsequent changes to its leadership ranks last year left him effectively out of the running to replace Gorman, who has indicated a desire to continue leading the bank for now. In 2018, Petitgas was appointed head of the bank's international operations as part of a management shuffle. A spokesperson confirmed the contents of the memo. The Financial Times reported the news earlier.
Petitgas was made co-head of investment banking in 2012 when longtime executive Paul Taubman left the firm. That made him responsible for global client coverage, mergers and acquisitions and capital markets. Petitgas joined Morgan Stanley in New York in 1993 and moved to the London office three years later. — Sridhar Natarajan, Bloomberg News

ANZ Bank to withdraw from Myanmar over 'operational complexity'

Brent Lewin/Bloomberg

Harry Brumpton and Chanyaporn Chanjaroen
Australia & New Zealand Banking Group plans to withdraw from Myanmar by next year citing increasing "operational complexity," underscoring how global companies are turning cautious on the country after a 2021 military coup. The move to cease operations in Myanmar is subject to local regulatory approval and the lender has been "working with its Institutional customers to transition to alternative banking arrangements," it said in a statement on Tuesday. Western nations led by the U.S. have imposed rounds of sanctions targeting the coup leaders, related business entities as well as a bunch of arms dealers since the 2021 military coup which toppled the Aung San Suu Kyi-led civilian government. The Financial Action Task Force last month added Myanmar to a group of high-risk countries, known as the "black list," citing its failure to make enough progress in addressing illicit financial flows. "The decision follows careful consideration of the local operating conditions," ANZ's Managing Director, International, Simon Ireland said in the release. "Our international network and supporting the trade and capital flows of our customers around the region is a critical part of our strategy, and will continue to be for the long term," he said. ANZ has operated in Myanmar since 2015, and has a small local team focused on supporting the onshore and cross-border needs of multinational companies, which includes services such as facilitating payroll, it said in the statement.
— Harry Brumpton and Chanyaporn Chanjaroen, Bloomberg News