Banks more confident about 2025 asset growth

January 3, 2025 2:43 PM

In this week's banking news roundup: A recent industry survey finds most participating banks predict asset growth for 2025; Frax Finance launches a new stablecoin backed by BlackRock; Camden National closes its acquisition of Northway Financial; and more.

Banks optimistic about 2025 asset growth, report says

Nearly all of the banks that participated in a recent industry survey predicted asset growth this year, with more than half of the respondents expecting assets to grow by at least 5% during the next 12 months. That's according to Wipfli, which surveyed 345 C-level executives at small, midsize and large banks about their growth strategies and concerns heading into 2025.

The results show 58% of responding executives think their bank's assets will grow by 5% or more, reflecting "a significant boost" compared with the prior year, when 36% of respondents had similar expectations, Wipfli said in its report.

Larger banks expressed more confidence in their growth projections than smaller banks, Wipfli said. About 44% of big-bank executives anticipate asset growth of at least 9%, compared with 11% of executives at midsize banks and 18% of executives at small banks that said the same. —Allissa Kline

Frax Finance launches BlackRock-backed stablecoin

Decentralized stablecoin protocol Frax Finance on Thursday launched a new stablecoin, called frxUSD, that is backed by BlackRock's USD Institutional Digital Liquidity Fund and tokenized by Securitize.

BlackRock's fund will serve as custodian for minting and redeeming the new stablecoin, according to a Frax release. The stablecoin is backed by assets held in BlackRock's BUIDL Fund, which invests in cash, U.S. Treasury bills and repurchase agreements, according to the release.

"By partnering with Securitize to access and leverage BlackRock's BUIDL Fund we are setting a new standard for stablecoins," said Sam Kazemian, founder of Frax Finance, in a statement. "frxUSD combines the transparency and programmability of blockchain technology with the trust and stability of BlackRock's prime treasury offerings." —Joey Pizzolato

Camden National in Maine closes acquisition of Northway Financial

Camden National in Camden, Maine, has closed its acquisition of Northway Financial in North Conway, New Hampshire. The all-stock deal was valued at $86.6 million when it was announced in September.

Camden said in a press release on Thursday that the combination created a bank with $7 billion of assets and more than 70 branches across New Hampshire and Maine.

"We are excited to have successfully completed Camden National's merger with Northway and, in doing so, to strategically bolster our New Hampshire presence, creating a premier publicly traded, northern New England bank," Simon Griffiths, president and CEO of Camden National, said in the release. "We remain committed to executing our long-term strategy of deepening customer relationships through advice-based conversations and exceptional customer service."

The conversion of Northway's products and services to Camden National's systems is expected to occur in mid-March. —Jim Dobbs

Checkout.com cuts hundreds of jobs as profits fall

U.K. payments fintech Checkout.com has cut 230 jobs following a revenue slump after it parted ways with Binance, one of its largest customers, according to a report from UKTN.

The cuts are the latest blow to the London-based payment processor, which has seen its valuation drop to $9.4 billion in 2023, down from $40 billion in 2022, according to UKTN.

Checkout.com cut ties with Binance, the world's largest crypto exchange, in August 2023, according to TechCrunch. Gross profit last year dropped 23% year over year to $57 million, largely due to the loss of Binance, UKTN said. —Joey Pizzolato

Crypto groups sue IRS over DeFi regulations

Three blockchain groups are suing the Internal Revenue Service over a new decentralized finance regulation that would require cryptocurrency exchanges to comply with brokerage reporting laws.

The Blockchain Association, DeFi Education Fund and the Texas Blockchain Council sued the IRS in the Northern District of Illinois on Dec. 30, alleging that the rule exceeds the Department of Treasury's authority and was in violation of the Administrative Procedure Act in its expanded definition of a broker.

The IRS's rule, which was finalized on Dec. 27 and is expected to go into effect in 2027, would require crypto brokers to report digital asset transactions and would extend reporting requirements to decentralized exchanges.

"Not only is this an infringement on the privacy rights of individuals using decentralized technology, it would push this entire, burgeoning technology offshore," said Marisa Coppel, head of legal at the Blockchain Association, in a statement. —Joey Pizzolato

India’s NCPI removes WhatsApp Pay restrictions

The National Payments Corporation of India has removed the onboarding cap for Meta's WhatsApp Pay on the Unified Payments Interface, opening up the payments tech to WhatsApp's entire userbase.

Previously, NPCI required WhatsApp Pay to expand its user base in a "phased manner," according to a NPCI release. The NCPI first imposed a 40 million-user limit on Meta's international messaging app in 2020, and lifted the cap to 100 million in 2022. WhatsApp has more than 500 million users in India.

India's UPI processed 15.5 billion transactions in November 2024, up from 11.2 billion transactions in November 2023, according to NPCI. —Joey Pizzolato