Goldman’s Marcus snags Uber exec; Berkshire unloads Wells Fargo shares

Receiving Wide Coverage ...

Meet the new boss

Goldman Sachs “is poaching an engineering executive from Uber Technologies to run Marcus, its digital-banking unit,” The Wall Street Journal reported. “Peeyush Nahar is set to join Goldman on June 1 as a partner and head of its consumer business. Mr. Nahar will fill a role vacated earlier this year when Marcus chief Omer Ismail left Goldman to run Walmart’s new fintech startup.”

“One of Mr. Nahar’s tasks will be achieving targets that Goldman executives had set for Marcus before the coronavirus pandemic hit last year. Those include amassing more than $20 billion of loan balances and attracting more than $125 billion of deposits by 2024. At the end of March, Marcus had about $8 billion of loan balances and about $100 billion of deposits. Even after hitting those targets, Goldman will remain a relatively small player in consumer finance.”

Meanwhile, Goldman plans to launch an app in the next few weeks for its Marcus customers in the U.K., Reuters reported. It also plans to “offer automated investment management to clients in the country by the first quarter of next year.”

“We are pivoting more into an investment and wealth provider rather than a full-service digital bank,” said Des McDaid, the head of Marcus U.K. Marcus “has attracted just over $30 billion in U.K. deposits since launching a savings account in 2018, accounting for 30% of Marcus's deposits globally.”

Dumped

Warren Buffett’s Berkshire Hathaway “sold the vast majority of its stake in Wells Fargo in the first quarter, unloading an investment that has been a staple of the conglomerate’s portfolio dating back to 1989,” the Financial Times reported. “The company disclosed it had shed 99% of its remaining stake in the bank — or some 51.7 million shares — reducing its holdings in Wells Fargo to just $26.4 million.”

“Berkshire had once been the bank’s largest shareholder, owning nearly a tenth of Wells’ stock with its stake eclipsing $30 billion in value in January 2018, according to filings with the Securities and Exchange Commission.”

Separately, Wells Fargo “has launched a 10-year commitment to help unbanked individuals in the United States gain access to affordable, mainstream bank accounts,” Reuters said. “The initiative aims to help Black and African Americans, Hispanics, and Native Americans, who account for more than half of the country's seven million unbanked households, have easier access to low-cost banking, Wells Fargo said.”

“As part of the plan, the bank has committed to redesigning 100 branches in low-to-middle income neighborhoods to enable one-to-one consultations, offer digital banking access and conduct financial health seminars. Through the initiative, the bank said it would deepen its existing relationships with Black-owned Minority Depository Institutions (MDIs), which are more likely to lend in underserved minority communities. That will include allowing customers of those institutions to withdraw cash from Wells Fargo's ATMs and incur no Wells Fargo fees.”

Wall Street Journal

Jumping ship

Credit Suisse “is facing an exodus of senior investment bankers in the wake of a $5.5 billion loss tied to the meltdown of Archegos Capital Management. At least 10 managing directors in the Swiss firm’s U.S. investment-banking division have internally disclosed plans to leave, most for rival firms. Other bankers are considering their options, and more are expected to depart in the coming weeks.”

“The debacle, coming on the heels of Credit Suisse’s involvement with the now-insolvent financing firm Greensill, forced the bank to cut its dividend and raise fresh capital from investors to shore up its balance sheet. The Swiss bank ousted top executives in the wake of the loss.”

Outperforming

“Investors are pouring into bank stocks like never before, putting the stocks on track for what could be their best year on record compared with the S&P 500. The KBW Nasdaq Bank Index is up about 37% this year, while the S&P 500 is up 11%. Smaller regional banks are doing even better, with the KBW Nasdaq Regional Banking Index up 38%. Last year, the big-bank index fell nearly 14%.”