Wednesday, February 29, 2012

Most customers with less than $100,000 unprofitable, JPMorgan says

Welcome to the morning roundup, a look at what's news in banking and finance.

Customers with less than $100,000 unprofitable. A JPMorgan Chase executive said Tuesday that under new regulations, about 70 percent of customers with less than $100,000 in deposits and investments will be unprofitable for big banks, Bloomberg reports. Those regulations include swipe fee caps on debit card transactions and limits on overdraft fees.

Wells could face SEC suits. Wells Fargo was one of a handful of companies who received so-called "Wells notices" warning them that they could face suits from the Securities and Exchange Commission over the sale of mortgage-backed securities, the Wall Street Journal says. The SEC will look to see if the banks did not disclose weakness in the underlying loan portfolios.

BofA gifts vacant houses. Bank of America has agreed to donate 75 vacant properties to the city of Kansas City, plus nearly $1 million to renovate them or tear them down, the Kansas City Star reports. The city worked toward a deal to help revitalize a depressed area of town. Bank of America has done similar deals with Cleveland, Detroit and Chicago.

Dividends could return. Analysts predict that dividends and share buybacks at financial companies -- which shrunk in the past few years -- could make a major comeback this year, Seeking Alpha says. JPMorgan and Goldman Sachs appear to be in the best position to do so.

Wall Street bonuses down. Bonuses at Wall Street securities firms likely fell 14 percent in 2011, hitting the lowest level since 2008, according to a report from the New York City comptroller's office, the Wall Street Journal reports. The New York firms paid about $19.7 billion
in cash, down from $22.8 billion the year before. The figures were calculated using personal income tax data.