Tuesday, October 9, 2012

Don't expect Wal-Mart to become Bank of America

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

Wal-Mart no BofA. Even though Wal-Mart and American Express announced yesterday that they are teaming up to provide a lower-income banking option that rivals that of some of its big-bank peers, TheStreet.com says not to expect them to provide an alternative that rallies the masses. Instead, they're more likely to develop some ideas big banks can adopt.

Libor losses. The Libor-manipulation that led to the massive penalty against Barclays and numerous other investigations will likely cost state and local governments upwards of $6 billion, according to an analysis by the Swap Financial Group, Bloomberg reports. That would add to the $4 billion in losses interest rate swaps have already cost U.S. governments after interest rates plummeted. North Carolina is among the states examining its exposure.

Julius Baer cutting jobs. Julius Baer, the Swiss bank that bought Bank of America's overseas private banking, is expected to cut more than 1,000 jobs beginning next year after the BofA deal closes, The New York Times reports. The cuts are to make the acquired unit -- which lost $30 million in the first half of this year -- profitable.

Merrill plaintiff lawyer unsatisfied. The plaintiff's lawyer in the Bank of America-Merrill Lynch acquisition shareholder suit, Max Berger, has now won six securities suits of more than $1 billion, The New York Times reports. But he doesn't see any substantive change. "It gives us a lot of business, but it still makes me sad,” he tells the Times.

More on Wall Street expect bigger bonuses. Almost half of Wall Street traders expect a larger bonus this year, according to an online survey, Bloomberg reports. That's up from the 41 percent who said the same thing last year.


N said...

I wonder how this will affect Wal-Mart's partnership with Woodforest Bank? They already have branches inside most Wal-Marts, at least around here. I assume Wal-Mart has an ownership stake in Woodforest, but maybe they're just collecting rent on the space. We opened a checking account there a couple years ago just to have a physical place to cash checks, get things notarized, etc. We still do most of our banking with the credit union, but with Woodforest, you've got a branch in nearly every town and city. The fee for a checking account is minimal, and if you're over 50 it's free. I know the target is also lower income folks, but the convenience of all the locations is hard to beat.

Anonymous said...