Clean slate Banks want to make it easier to hire people with criminal records, especially those with relatively minor offenses. “Bankers are generally wary of hiring individuals with criminal records, but some say finding attractive candidates can be difficult in rural areas amid a tight labor market. Under a 1950 law, banks are barred from hiring anyone convicted of a crime of dishonesty or breach of trust. The only way around the law is to get a waiver from the Federal Deposit Insurance Corp.” But the agency has approved less than 60% of requests over the past 10 years. “Banks say the restriction is too tight, keeping them from hiring a more diverse pool of candidates.”
Everyone wins PayPal may be close to selecting Synchrony Financial to issue a credit card for its “massive but still-not-lucrative” Venmo digital payments unit, “the latest technology company to explore entering the credit-card business as a way to boost revenue and consumer engagement. A Venmo credit card could help push Venmo into the black and help achieve a broader PayPal goal of increasing its market share at offline retailers. With its credit card, Venmo hopes to squeeze more revenue from the many young consumers who use only its free service.”
PayPal Holdings Inc. signage is displayed outside the company's headquarters in San Jose, California, U.S., on Tuesday, Jan. 24, 2017. PayPal Holdings Inc. is scheduled to release earnings figures on January 26. Photographer: David Paul Morris/Bloomberg
David Paul Morris/Bloomberg
Best practices Morgan Stanley “has set up a Data Center of Excellence to help address the ongoing deluge and complexity of enterprise data and to help develop artificial intelligence applications that rely on high-quality data. Created last year with staffers spread across New York and London, the Data Center of Excellence works with the bank’s various business and infrastructure divisions to establish best practices and controls around data quality and data security.”
Financial Times
Costly delay Goldman Sachs was the biggest loser after Wall Street’s six biggest banks “posted a decidedly mixed set of results for the first quarter, with retail banks generally triumphing over their more capital markets focused rivals and dealmakers having a better time of it than traders.” Goldman shares fell nearly 4% on the day it reported earnings. “Analysts attributed the fall to Goldman’s decision to defer a much-anticipated strategic update until early next year.”
Backing the bank Institutional Shareholder Services, the “influential” shareholder advisory company, is siding with Barclays over activist investor Edward Bramson ahead of a “showdown at the bank’s annual meeting next month.” Bramson, who owns a 5.5% stake, “is pushing for the U.K.-based lender to scale back its underperforming investment bank in an attempt to boost overall returns. Those demands have put him at odds with Jes Staley, Barclays’ chief executive, who has pledged to protect Britain’s last remaining global investment bank from further cuts.”
Betting on blockchain JPMorgan Chase is to looking to expand the Interbank Information Network, “the industry’s leading blockchain technology, to help smooth the banking industry’s payment system while also inviting fintechs to experiment on how to develop the platform.” Since last year, “75 of the world’s biggest banks [have] joined the venture. The platform already allows banks to quickly resolve compliance issues that can delay payments by weeks. They also hope that by making the global payments rails run more easily they will be able to better defend their cross-border-payments business from the rise of digital payments providers such as TransferWise, Revolut and Ripple.”
More pain European investment banks are expected to fall even further behind their American counterparts when they start reporting first quarter earnings. Analysts predict profits “will drop as much as a quarter, intensifying calls for another round of job cuts and retrenchment.”
Quotable
“The dissident campaign — which is built on a brief investor letter disclosed a few weeks before the annual meeting — falls short of what can reasonably be expected from a shareholder trying to address issues at a £28 billion systemically important bank.” — Institutional Shareholder Services, in a letter advising Barclays shareholders to vote against giving activist investor Edward Bramson a seat on the bank’s board.
Federal Reserve Chair Jerome Powell said there was a "high degree of unity" among committee members during this week's Federal Open Market Committee vote. Out of 12 FOMC members, 11 voted for a 25 basis point cut.
The Federal Open Market Committee's decision to reduce interest rates for the first time in nine months lifted bank stocks Wednesday. The 25-basis-point reduction could lead to net interest income headwinds now, but loan growth later, analysts said.
Community Financial in Syracuse has made its biggest investment ever in an outside company, taking a $37.4 million equity stake in an insurance provider that focuses on the rental housing market.
The two BNPL giants' pay-over-time loans will now be available for in-store purchases on Apple Pay in a move to capture more sales at brick and mortar stores.
