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Jun 18, 2013

Why Citi wants to rack up U.S. taxes

June 18 (Reuters) – Over the past few years, Citigroup Inc
has been grappling with an unusual problem – how to incur
more U.S. taxes.

The third-largest U.S. bank tried to buy the foundering
Wachovia Corp in the fall of 2008 in part because the deal would
have brought it more taxable domestic income, a person familiar
with the matter said.

Jun 4, 2013

Insight: Corbat faces ghost of Weill’s deals in Citi’s machines

By Dan Wilchins, David Henry and Nadia Damouni

(Reuters) – When Vikram Pandit was abruptly ousted as Citigroup Inc’s (C.N: Quote, Profile, Research, Stock Buzz) chief executive late last year, senior bank employees speculated for weeks about who would follow him out the door.

Chief Operating Officer John Havens had already left with Pandit, and the employees bet the new CEO, Michael Corbat, would push out other Pandit loyalists. High on their list was Don Callahan, who headed operations and technology.

Jun 4, 2013

Corbat faces ghost of Weill’s deals in Citi’s machines

June 4 (Reuters) – When Vikram Pandit was abruptly ousted as
Citigroup Inc’s chief executive late last year, senior
bank employees speculated for weeks about who would follow him
out the door.

Chief Operating Officer John Havens had already left with
Pandit, and the employees bet the new CEO, Michael Corbat, would
push out other Pandit loyalists. High on their list was Don
Callahan, who headed operations and technology.

May 7, 2013

Column: Five days below the poverty line

By Dan Wilchins

(Reuters) – My wife Becky and I experimented with radically cutting our food costs last week as part of a fundraising campaign created by a hunger charity.

Under the “Live Below The Line” campaign sponsored by the Global Poverty Project, an Australian charity, for five days we spent $1.50 per person per day on food, which is the extreme poverty line globally, according to the World Bank.

May 6, 2013

MBIA, Bank of America reach $1.6 billion settlement

By Karen Freifeld and Dan Wilchins

(Reuters) – Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) will pay $1.6 billion in cash to MBIA Inc (MBI.N: Quote, Profile, Research, Stock Buzz) and receive the right to buy a 4.9 percent stake in the bond insurer to resolve long-running litigation between the companies, the bank said on Monday.

Bank of America will also remit $137 million worth of MBIA senior debt it acquired in December and provide MBIA with a $500 million credit line as part of the deal.

Apr 13, 2013

Analysis: JPMorgan’s lukewarm results put Dimon under more pressure

NEW YORK (Reuters) – JPMorgan Chase & Co Chairman and CEO Jamie Dimon, who came through the financial crisis relatively unscathed, is suddenly looking a little less secure.

The top U.S. bank by assets reported tepid first-quarter results on Friday. Income in its biggest businesses – investment banking and consumer lending – fell, excluding accounting adjustments. Outstanding loans grew by just 1 percent, and profit margins on lending narrowed. Stock and bond trading revenue fell.

Apr 13, 2013

JPMorgan’s lukewarm results put Dimon under more pressure

NEW YORK, April 13 (Reuters) – JPMorgan Chase & Co
Chairman and CEO Jamie Dimon, who came through the financial
crisis relatively unscathed, is suddenly looking a little less
secure.

The top U.S. bank by assets reported tepid first-quarter
results on Friday. Income in its biggest businesses – investment
banking and consumer lending – fell, excluding accounting
adjustments. Outstanding loans grew by just 1 percent, and
profit margins on lending narrowed. Stock and bond trading
revenue fell.

Apr 12, 2013

JPMorgan net up as “Whale” fades, but key units tepid

NEW YORK (Reuters) – JPMorgan Chase & Co posted higher first-quarter profit on Friday as it spent less money on litigation, but most of its major businesses turned in tepid performances, and the bank’s overall revenue declined.

The results reflected the pressure the largest U.S. bank is under even as it recovers from the disastrous “London Whale” trading losses that cost more than $6 billion last year.

Apr 4, 2013
via Unstructured Finance

“I’m from the Treasury, and I’m here to help”

Photo

Ronald Reagan famously said that the “nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” But according to a report from SNL, the government may actually help banks when it forces them to add directors to their boards. Every bank CEO’s worst nightmare is having the government name directors to his or her board. Usually, banks pack their boards with clients or prominent people that offer prestige and potential business leads, but little substantive oversight. At the smaller banks that SNL is focusing on, that often amounts to people like the owner of the local car dealership, or the owner of the local golf equipment seller. (For a stereotypical example of a community bank’s directors, consider the board of Smithtown Bancorp, which was sagging under the weight of failed loans before being taken over by People’s United Bank in 2010.)
The Treasury, on the other hand, tends to appoint people with actual banking experience, who can do what board members are supposed to do: keep an eye on management for the benefit of shareholders. The government only does so for banks that have lost their way: the Treasury has the right to name directors to boards of banks that received bailout money under the Troubled Asset Relief Program, and that missed six quarters of dividend payments. Typically, these appointees are bankers with more than 20 years of experience.
By SNL’s reckoning, the banks with Treasury-appointed directors have racked up median stock gains of 50.38 percent since taking on the new board members, compared with a median gain of 28.22 percent in an index of bank stocks.
Of course there may be other reasons for this outperformance – for example, it may be that small bank stocks in general have outperformed larger bank stocks over the relevant time frame, or that relatively weak banks have been in greater demand from value investors betting on an improving economy. But it may also be that the government has found a fix for the principal-agent problem at banks that have stumbled into trouble.

Feb 8, 2013

Exclusive: CIT has explored possible sale – sources

NEW YORK (Reuters) – CIT Group Inc (CIT.N: Quote, Profile, Research, Stock Buzz) had preliminary talks over the past year and a half to sell itself to banks, including Toronto-Dominion Bank (TD.N: Quote, Profile, Research, Stock Buzz) and Wells Fargo & Co (WFC.N: Quote, Profile, Research, Stock Buzz), but nothing came of the conversations, according to three people familiar with the specialty finance company.

Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) bankers have had informal talks on behalf of CIT with a number of banks, but the Wall Street firm has not been formally retained as an adviser, according to two of the people. CIT Chief Executive Officer John Thain, who formerly worked at Goldman, is not under any immediate pressure to sell the company, the sources said.

    • About Dan

      "Dan Wilchins oversees a team of reporters covering U.S. commercial banks, investment banks, and insurance companies. Based in New York, he has also covered securitization, derivative markets, and corporate bonds."
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