Tuesday, July 31, 2012

BB&T gets go-ahead to buy BankAtlantic, deal to close today

After months of legal wrangling, BB&T said Tuesday it has gotten the go-ahead from regulators to purchase Florida-based BankAtlantic in a $300 million deal set to close today.

The deal to take on 78 branches, $2.1 billion in loans and $3.3 billion in deposits was originally announced in November, but a Delaware court blocked it four months later saying the terms of the deal left behind too many distressed assets. The Winston-Salem bank tweaked its bid in March.

BankAtlantic's branches are expected to rebrand as BB&T in the fourth quarter.

RBS negotiating Libor settlement, sources say

Welcome to the morning roundup. Here's a look at today's banking and finance headlines.

RBS negotiating Libor deal. Royal Bank of Scotland Group is negotiating a settlement with authorities investigating attempted rate-rigging, the Wall Street Journal reports. The deal could be announced in the next few months, people familiar with the situation told the Journal.

Fed officials push for stimulus. Some Federal Reserve officials are trying to persuade colleagues to take new action to stimulate economic growth, arguing the economy's likely path itself is sufficient reason, the New York Times reports. Meanwhile, stocks opened flat ahead of the start of the Fed's two-day policy meeting, Reuters writes.

Job cuts. Deutsche Bank will eliminate 1,900 jobs, including 1,500 in its investment bank, Bloomberg reports. Germany's biggest bank is cutting the jobs in an effort to save nearly $3.7 billion as it grapples with declining revenue.

UBS profit falls. Profits at UBS fell 58 percent in the second quarter, largely due to a slide in investment banking income, the New York Times reports. The drop comes as the Swiss bank's CEO is scaling back investment banking and expanding wealth management operations.

Monday, July 30, 2012

Tree.com taps investment banker for CFO role

Tree.com, the Charlotte-based parent company of loan lead generation sites like LendingTree, has tapped a former Bear Sterns investment banker to be its new chief financial officer, the company announced Monday.

Alex Mandel, 42, had served as a financial consultant for the company since July 2010 before being named to fill the CFO role Monday. Before that, he worked 13 years as an investment banker advising media and entertainment businesses.

"I'm very excited to formally join Tree.com," said Alex Mandel. "This opportunity comes at a pivotal point in the company's evolution. We have become a more focused, nimble enterprise, with substantial resources to support our future growth."

He will be paid a $250,000 annual salary and be given 50,000 restricted stock units that vest over time, according to an SEC filing. Tree.com's stock (Nasdaq: TREE) was trading at $13.42 on Monday afternoon.

PNC putting ATMs in Harris Teeters

PNC Bank, which recently entered the Carolinas through its acquisition of RBC Bank, is putting 138 ATMs in Harris Teeter grocery stores across the two states, the bank said Monday.

Another 53 ATMs will go in Harris Teeters in Florida, Georgia, Virginia, Maryland and Delaware. They should be in place by the beginning of September.

Cardtronics, a publicly traded ATM operator that has a contract with Harris Teeter, owns the machines. ATMs in Harris Teeters had been branded by Bank of America.

The Pittsburgh bank's ATM expansion comes as other banks are pulling back. Bank of America cut 9 percent of its ATMs in the past year, including a number at gas stations and malls.

Bank of America already considered, rejected breaking up

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

Break up BofA? Nope. Bank of America's top executives and board members have already considered -- and rejected -- breaking up, illuminating a thought process that makes the increasing pressure from regulators and even industry insiders to separate apart the country's largest banks unlikely, the Wall Street Journal says. CEO Brian Moynihan recommended that the board not spin off Merrill Lynch because it had become profitable, and said getting rid of it could expose it to liquidity issues. Moynihan also rejected putting Countrywide in bankruptcy because of the legal implications. (Bonus appearance in the article from former First Union CEO Ed Crutchfield, who now seems to be questioning the big bank model. He told the WSJ that putting "gargantuan, completely unrelated businesses under one roof is probably not a good idea.")

Deposit insurance lobbying. Banks are lobbying Congress to extend an expanded deposit insurance program  created during the financial crisis that is now set to expire, Reuters reports. The Transaction Account Guarantee program insured all deposits in checking accounts, beyond the $250,000 limit insured by the FDIC. Community banks in particular are in favor of the program since it helped persuade large depositors to bring them their business.

Wells growing in Asia. Wells Fargo will increase it's staff in Asia by 10 percent in the next three years, Bloomberg reports, even as other banks are pulling back in the region. The bank's staff there focuses on corporate banking services to large Asian companies.

More Libor. British banking regulators are launching a review of how Libor is set, governed and regulated, as investigations into rate-rigging continue, The New York Times reports. The result could be criminalization of Libor manipulation.

Friday, July 27, 2012

Homeowners sue BofA over force-placed insurance

A Florida couple is suing Bank of America Corp. over its force-placed insurance practices, saying the lender engaged in "exploitative and self-dealing practices" to the detriment of its borrowers.

Buying various forms of homeowners insurance for borrowers whose coverage has lapsed is standard "if done properly," mortgage customers John and Jacqueline Totura said in the lawsuit filed in federal court in Charlotte Friday. But the Charlotte bank manipulated the market by entering into an exclusive relationship with Balboa Insurance, a unit Bank of America owned until last year, the suit said.

Balboa paid a kickback from each force-placed policy to the bank, resulting in insurance that cost more than comparable policies purchased on the open market, the homeowners said. That "benefited both BAC and Balboa substantially at the expense of BAC consumers," argued the Toturas, who are asking for unspecified damages.

A bank spokesman on Friday declined to comment. The lawsuit is the latest in a string of force-placed insurance claims against big banks. Wells Fargo was accused in a lawsuit this month of charging inflated premiums for force-placed insurance, for instance.

And earlier this year, a New York state financial services agency said it was investigating several big banks, including Wells and Bank of America, to see whether they fraudulently steered homeowners into overpriced insurance policies.

Is the banking industry's power waning?

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

Bank power. Despite rebounding quickly from the financial crisis, the banking industry's power is under siege now in the wake of the massive trading loss at JPMorgan Chase and the Libor-rigging scandal at Barclays, The New York Times' Floyd Norris says. The industry's' political clout may have peaked this spring.

Fed's 'nuclear options.' Bank of America Merrill Lynch economists laid out what they believe the Federal Reserve's "nuclear options" are to get the economy moving as the central bank faces increasing pressure to act, the Wall Street Journal reports. These include putting a ceiling on bond yields, weakening the dollar or trying to push inflation.

CFPB enforcement risk. Other banks are at risk of fines from the Consumer Financial Protection Bureau after the new regulator took its first enforcement action against Capital One, Bloomberg says. Capital One was fined $210 million for what the CFPB termed deceptive, high-pressure sales tactics to sell credit monitoring and payment protection programs. But the contractors Capital One used to sell these products also do significant business with Bank of America and Wells Fargo, leaving them open to possible settlements.

Growth slowing. U.S. economic growth slowed in the second quarter, the Department of Commerce said Friday, increasing worries about the recovery, the Wall Street Journal reports. GDP grew at an annualized 1.5 percent, down from 2 percent growth in the first quarter.

Thursday, July 26, 2012

Bank of America offering mobile check deposit

Bank of America Corp. has expanded its mobile banking platform, offering mobile check deposit and other services, it announced today.

Customers of the Charlotte-based bank will now be able to "completely manage their finances through their mobile device," from depositing checks to transferring money using only an e-mail address or mobile phone number, the bank said.

"Our customers are living in a more connected world, and that extends to their financial lives," said Aditya Bhasin, Bank of America's consumer marketing and online and mobile executive. "This 'always-on' environment calls for more convenience, control and flexibility."

The new check deposit function allows customers to snap photos of their checks and deposit them via a tablet or smartphone app. The service is available now for iPad and will be offered in coming weeks on the iPhone, Android and Windows Phone, the bank said.

Bank of America is also rolling out person-to-person e-mail and mobile transfers, allowing customers to send money to others using a person's e-mail address or phone number, rather than detailed account information.

The nation's second-largest lender by assets said in May it surpassed 10 million mobile banking customers, establishing it as the dominant player in that arena. But it has lagged other banks, from San Francisco's Wells Fargo & Co. to Charlotte-based NewDominion Bank, in expanding its mobile services. For details about the bank's mobile platform, visit bankofamerica.com/mobilebanking.

Lawmakers react to Weill's call to break up banks

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

Breaking up the banks. Former U.S. Senator Phil Gramm, who helped pave the way for giant global banks, said breaking up those lenders won't make them safer, Bloomberg reports. That comes after former Citigroup Inc. CEO Sandy Weill said Wednesday on CNBC he would now support dismantling financial holding companies, splitting investment banking from consumer banking. Also Thursday, former Connecticut Senator Chris Dodd defended his signature banking legislation on CNBC, drawing a contrast with Weill's comments. 

Dodd-Frank's anniversary. Congressman Jeb Hensarling weighs in on the two-year anniversary of the Dodd-Frank financial reform legislation in the Wall Street Journal, saying its rules "are proving to be some of the most confusing, complex and harmful our capital markets have ever seen." 

Rate-rigging. Treasury Secretary Timothy Geithner was questioned Wednesday on the Libor scandal, with lawmakers at a House hearing wondering why he failed to stop the wrongdoing during the financial crisis, the New York Times reports. 

Jobless claims fall. The number of people filing new claims for unemployment benefits in the U.S. fell last week to near a four-year low, Reuters reports. Stock futures climbed on that news and a rise in durable goods orders. But experts said the economy still appears stuck in a rut.

Park Sterling Corp. posts a profit

Charlotte's Park Sterling Corp. posted a $678,000 profit in the second quarter, reversing a loss from last year and returning to core loan growth.

The growing Charlotte bank also continued to work off nonperforming loans, some of them through refinancing.

The second quarter income is less than a $1.7 million profit in the first quarter of this year, but beats a loss of $3.1 million in the second quarter of 2011.

Park Sterling also reported progress in completing its acquisition of Gastonia-based Citizens South Banking Corp., which was announced in May.

Wednesday, July 25, 2012

Wells Fargo adds business bankers in Rock Hill

Wells Fargo has added two business bankers in Rock Hill, and says it is seeing optimism in the business community about the availability of credit.

Kerry Mast and Julie Watts will specialize in business deposits, cash management and credit risk management.

Both come from TD Bank, which took over Carolina First Bank last year. Both are also involved in local philanthropic organizations.

Chain owned by former Panther's firm converting uptown restaurant

Wild Wing Cafe, the chain acquired by former Carolina Panther Muhsin Muhammad's private-equity firm this year, is converting its uptown restaurant to a corporate-owned and managed operation, it announced today.

Charlotte-based Axum Capital Partners said the restaurant at the EpiCentre, formerly owned by a franchisee, will undergo remodeling and reopen Aug. 23. It's part of Wild Wing's strategy to revitalize restaurants in key locations across the country, said the firm, which acquired a controlling stake in the Mount Pleasant, S.C., chain in January.

"We're totally bullish on the Charlotte market," said Wild Wing chief executive William Prather, who stepped into the chain's top role in March. "The EpiCentre location has especially strong potential because of the uptown sports activities and its proximity to the light rail line."

Among the planned changes: Moving the restaurant's stage to better highlight live local and national bands, and ramping up the emphasis on sports, said Muhammad, who played pro football for 14 seasons before making the leap into private equity.

Wild Wing, which generated $100 million in sales last year, has 34 restaurants across the Southeast, including locations in southwest Charlotte and University City.

Axum acquired the company in its first deal. The firm, which targets lower middle-market businesses in the food and beverage and educational services sectors, is evaluating other deals, its partners have said. Its target fund size is $100 million to $150 million, with about five to seven companies in its portfolio.

Read more here: http://obsbankwatch.blogspot.com/2012/03/former-panthers-private-equity-firm.html#storylink=cpy

Trust in U.S. financial system hits a low

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

Trust in finance waning. Trust in the U.S. financial system has fallen back to its lowest point since early 2009, Forbes reports, citing an index compiled by the business schools of the University of Chicago and Northwestern University. The report's authors speculate that the waning trust stems from the multi-billion trading loss at JPMorgan Chase. Trust in small banks, however, is rising.

Wells assets hard to value. Of the six largest U.S. commercial banks, Wells Fargo has the largest percentage of hard-to-value assets in its securities portfolio, Standard and Poors says, as reported by Bloomberg. These so-called "Level 3" assets are highly dependent on the company's internal valuation. PNC has the second-most, and JPMorgan Chase had the third-most.

Fed close to action. As disappointing economic news continues, the Federal Reserve appears closer to deciding to take action, the Wall Street Journal reports. The Fed could make a move as early as next week, when it meets again, or wait until September. Some options include buying mortgage-backed securities or extending its commitment to keep rates low past 2014.

Banker calls for break-up. Former Citigroup CEO Sandy Weill has joined the call to break up the country's largest banks, telling CNBC in an interview that he's in favor of re-seperating investment banks from commercial banking units. That's essentially a return of Glass-Steagall, an oft-discussed idea.

Tuesday, July 24, 2012

Report cites racial lending disparities

A report from a consortium of economic justice advocacy organizations points to racial disparity in the types of mortgages found in white and minority communities in Charlotte and six other U.S. cities.

While government-backed, higher cost loans make up 37 percent of mortgages in predominantly white Charlotte neighborhoods, they account for 72 percent of mortgages in black and Latino communities, according to the report, which was based on 2010 Home Mortgage Disclosure Act data.

The report's authors said they did not have concrete evidence of discrimination, but they said it's a fair question in light of Wells Fargo's recent $175 million settlement of claims that it steered black and Latino homebuyers into costlier mortgages. The bank did not admit wrongdoing and said it settled only to avoid costly litigation.

The authors also rejected the argument that a difference in creditworthiness or personal income between white and minority communities makes up the difference.

"There are plenty of people out there who should be able to make their payments and keep a job even if they don't have a 620 credit score," said Adam Rust of Raleigh-based Reinvestment Partners, one of the report's authors.

The report also looks at New York City, Los Angeles, Chicago, Boston, Cleveland, and Rochester, N.Y.

While government-backed FHA or VA loans typically require a smaller down payment and are available to lower-income homebuyers, they also tend to be costlier.

Bank analyst airs service grievances with Wells Fargo

It's easy these days to criticize a company online when you have a bad experience at a restaurant, big-box store -- or a bank. Rarely does an aggrieved customer have a distribution list of journalists around the country.

But that's what happened Tuesday when bank analyst Dick Bove of Rochdale Securities, a frequent source for financial magazines, newspapers and CNBC, and a stalwart defender of the nation's big banks, sent out a note detailing his frustrations with Wells Fargo's customer service.

His list of grievances would read strikingly familiar to most everyday customers, and resonates particularly here in Charlotte.

For background, Bove, who lives near Tampa, revealed that he was a long-time Wachovia customer and said the Charlotte bank "excelled in customer service." After Wells Fargo acquired the bank as it teetered on the edge of failure, the service began to decline, Bove says, and is now "unacceptable." Here's what happened to him, as he recounts:
  • No one greets him when he enters his local branch. One time, the banker he wanted to meet made him wait, went to the bathroom, then left the bank.
  • Another time, Bove came to the branch with a "low six figure check" and some questions. A banker told him he couldn't help, and to call Wells customer service line. The customer service rep on the phone told him to go back to the branch.
  • A banker called him telling him to refinance his mortgage through HARP, though he did not qualify. Four months later, the bank rejected his refinancing application.
  • Wells charged Bove fees on his checking account for "unexplained reasons." He decided to just pay them rather than go through the bank's bureaucracy.
Of course, Bove acknowledges that this is just one man's experience. But as an analyst, his opinion matters a deal more than the average Joe. In his note, he says that he now doesn't take what the bank says at face value despite long believing Wells Fargo is the best run bank in the country.

For the record, Bove still feels Wells Fargo's stock (at $33.41 this morning) is undervalued. 

Also for the record, Bove is closing Wells accounts and opening ones at JPMorgan Chase.

Update: Wells Fargo provided the following statement:
While we do not comment on analyst reports, it is important to note that Wells Fargo conducts more than 60,000 surveys of its retail banking customers every month. Throughout the merger nearly eight out of 10 customers indicated they were "extremely satisfied" with their recent visit to a Wells Fargo retail banking store, the highest possible rating. During the second quarter 2012, customers again rated their experience in our stores at an all-time high, based on survey results.
Customer service is incredibly important and central to our vision and values at Wells Fargo, just one reason we survey our own customers as we know our most important feedback comes directly from them. We look to the data, we also recognize that we're only as good as our last interaction and we remain committed to putting our customers at the center of everything we do.
Wells Fargo ranked #1 in customer satisfaction among the largest U.S. retail banks in the annual American Customer Satisfaction Index (ACSI) survey in 2009 through 2011. Wachovia ranked number one in the survey from 2001 to 2008.
At Wells Fargo's investor day in May, community banking regional president Stan Kelly said the bank's internal surveys showed that service in North and South Carolina was better than anywhere else in the country.

Regulators investigating traders in Libor case

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

Libor probe expands. Regulators are investigating several groups of traders for allegedly conspiring to rig interest rates, people close to the probe told the Wall Street Journal. The criminal and civil investigation includes more than a dozen traders from at least nine banks, the Journal writes.

Internal rate-rigging investigation. An internal probe at Deutsche Bank found two former traders might have collaborated to manipulate benchmark interest rates, but there was no indication of failure at the top of the company, Reuters reports, citing people close to the investigation.

Subprime rally. U.S. home-loan securities without government backing are rallying as investors bet the housing bust is over and bond dealers snap up supply, Bloomberg reports. Securities backed by option adjustable-rate mortgages jumped 7 percent in the past month to the highest level since May 2011, for instance.

London Whale. Trading spikes that temporarily boosted the value of credit derivatives held by JPMorgan Chase & Co. might offer clues about whether traders there masked big losses, Bloomberg reports. The surges came right before monthly bank audits to verify prices.

European debt. Signs of trouble in Europe persist, with markets falling Monday amid doubts about Greece's ability to make its debt payments and intense pressure on Spain's economy, the New York Times reports. In recent years, August has brought financial turmoil for Europe - and this year, "all signs again point to a nerve-wracking end of summer," the Times writes.

Monday, July 23, 2012

Citizens South reports second quarter loss

Gastonia-based Citizens South Banking Corp. reported losing $716,000 in the second quarter, reflecting an improving but still troubled balance sheet.

Citizens South earned $2 million in the same time period last year, boosted by its acquisition of a failed bank in north Georgia. It lost $2.3 million in the first quarter of 2012.

The bank set aside less for bad loans than the quarter before, but its earning assets decreased as well.

Citizens South announced in May it would be acquired by Charlotte-based Park Sterling Corp. in a $77.8 million deal. Pending regulatory approval, it is schedule to close in the fourth quarter.

Drought could impact Wells Fargo earnings

The severe drought ravaging farmland in the Midwest could put a dent in the upcoming profits of Wells Fargo, one of the nation's largest crop insurers.

Analysts with investment firm Stifel Nicolaus tried to put a dollar figure on the potential impact in a research note released Monday, as corn crops continue to suffer in one of the worst droughts since 1956.

While Wells Fargo has underwritten about $1.8 billion in crop insurance in affected states since last year, more than three-quarters of that has been reinsured.

Taking that into account and using loss estimates from the severe 2002 drought, the analysts came up with a potential hit of $380 million, or 5 cents per share. They called it "very manageable."

Wells Fargo told Bloomberg that it expects an "extreme claims season," but would not estimate what the ultimate impact would be.

Bank of America dropping ATMs at malls, gas stations

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

BofA pulls ATMs. Bank of America is pulling its ATMs from many shopping malls and gas stations as it looks to cut costs, Bloomberg reports. The Charlotte bank's total number of ATMs has fallen 9 percent this year, and it decided to end its contract to rent space with the largest U.S. mall operator, Simon Property Group Inc., and a large gas station owner.

Bank subsidiaries. The biggest U.S. banks have created more than 10,000 legal subsidiaries in the past two decades in a bid to escape taxes and regulation, according to a Federal Reserve study reported on by Bloomberg. JPMorgan Chase, the largest U.S. bank by assets, had the most with nearly 3,400, while Bank of America had more than 2,000. Wells Fargo had about 1,400. Critics say this makes banks too complicated to manage.

VCs doing PR. Once secretive, prominent venture capital firms like Sequoia Capital are increasingly hiring public relations staffs and actively promoting themselves, The New York Times says. Observers say it's because it's becoming harder to get investors in a consolidating industry.

Friday, July 20, 2012

British central bank: U.S. regulators gave no warning on Libor

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

Libor. E-mails from the Bank of England released this morning say American authorities did not warn British officials about the rate-rigging scandal during the financial crisis in 2008, the New York Times reports. Meanwhile, the Times writes, the Libor scandal exposed flaws in the rate-setting process, highlighting a benchmark that is "largely guesswork," even if banks do not manipulate rates.

Rate-rigging settlement. A group of banks being investigated in the Libor scandal is looking to pursue a group settlement with regulators, rather than face being singled out, people familiar with the situation told Reuters. It's unclear which banks are involved in the talks.

Wall Street: Be patient. The five biggest Wall Street banks are asking investors to be patient after reporting the worst start to a year since 2008, Bloomberg reports. The firms blamed their revenue declines on low interest rates and a drop in trading amid concerns over Europe's troubles and slowing growth in the U.S. and China.

Spain bailout. Euro zone finance ministers have given a final go-ahead to Spain to bail out its troubled banks, the Wall Street Journal reports. The finance ministers said Madrid will need to overhaul its financial sector and achieve deficit-reduction targets to continue receiving aid.

Thursday, July 19, 2012

Big banks plan more job cuts

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

Cutbacks. Big banks are preparing to slash thousands of banking and trading jobs, a sign of continued weakness in the banking industry, the Wall Street Journal reports. The news, which includes Credit Suisse, Citigroup and Goldman Sachs, comes a day after Charlotte-based Bank of America provided new details on the second phase of its wide-ranging efficiency initiative.

Libor. Wall Street giants Goldman Sachs and Morgan Stanley are among the financial firms that might bring lawsuits against their biggest rivals related to the Libor rate-rigging scandal, Bloomberg reports. One analyst said it could become "a feeding frenzy of sharks."

Earnings. Morgan Stanley turned a profit in the second quarter, but its revenue fell amid pressure facing the financial services sector, the New York Times reports.

Jobless claims. The number of workers filing new claims for jobless benefits climbed last week after a sharp drop in the previous report, Reuters writes. The level of initial claims was higher than economists expected, signaling that hiring remains weak. Still, stocks rose this morning, largely driven by corporate earnings.

BB&T reports record second-quarter earnings

BB&T reported Thursday that it earned a record $510 million for shareholders in the second quarter, 66 percent higher than the same time period last year.

The Winston-Salem bank's 72 cents per share edged out analysts estimates.

BB&T's mortgage banking income more than doubled, to $182 million, strengthened by the wave of refinancing. Overall, revenue was up 5 percent, which the bank attributed to its acquisition of wholesale insurance brokerage Crump Group Inc.

At the same time, the bank charged off less for bad loans and spent less on foreclosed properties.

"We are excited to report the strongest net income for any quarter in our history," CEO Kelly King said in a statement.

Wednesday, July 18, 2012

Mortgage repurchase claims rise at BofA

Mortgage repurchase claims at Bank of America surged more than 40 percent in the second quarter, the bank said Wednesday, a fact that analysts repeatedly questioned but bank executives downplayed.

The putback requests reached $22.7 billion, up from $16.1 billion last quarter. Bank of America has reserved for $15.9 billion.

Mortgage putbacks occur after a bank sells a mortgage to an investor, often to be securitized. If the purchaser of the loan determines that the bank originating the mortgage misrepresented the quality of the loan, the buyer can attempt to force the bank to repurchase it. They're often called rep and warranty claims.

At Bank of America, the greatest volume of repurchase requests come from Fannie Mae and Freddie Mac. The Charlotte bank has said it has a disagreement on the validity of Fannie's claims. Chief Financial Officer Bruce Thompson also said a settlement announced Tuesday with Syncora also would have reduced that figure.

The issue gathered the lion's share of questions from analysts on a conference call with Bank of America's management Wednesday morning. Brennan Hawken, an analyst at UBS, noted that the bank's claims were more than six times higher than any of its peers, but had only set aside about twice as much money.

"All we can really say at this point, quite frankly, is that the reserving is based on our view of what the agreements are," Thompson said in reply. "There are disagreeents that are out there. I'm not sure there's a lot more to say on that."

Bank of America settles with insurer for $375 million

Bank of America will pay securities insurer Syncora Holdings Ltd. $375 million to settle claims that Countrywide didn't tell the company about the risks of mortgage-backed securities it insured, Syncora announced late Tuesday.

The lawsuit was filed in 2009.

Bank of America continues to deal with litigation involving Countrywide mortgages bundled into securities and sold to a range of parties. The securities fell apart during the financial crisis.

BofA stock pointed higher in pre-market trading

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

BofA pointed higher. Bank of America stock was pointed higher in pre-market trading after the bank reported second quarter earnings of 19 cents per share, beating analysts estimates. The results are a stark difference from a year ago, when the Charlotte bank posted its largest loss ever on a huge write-down.

Libor woes. Regulators at the Federal Reserve and CFTC say that the key Libor interest rate is still flawed and lacks credibility, The New York Times reports. Lawmakers have turned their attention to the rate after Barclays settled charges that it manipulated it.

Goldman cuts. After posting disappointing results in the second quarter, Goldman Sachs will cut several hundred jobs and trim half a billion from its expenses, the Wall Street Journal reports. The investment bank's staff is already 17 percent smaller than in 2010.

Fed hesitant. Federal Reserve Chairman Ben Bernanke told a Senate committee that the Fed is still trying to determine whether the economy is recovering or is still "stuck in the mud," The New York Times reports. The comments are likely a signal that the Fed is hesitant to take further dramatic action to spur the economy.

Tuesday, July 17, 2012

Libor-rigging suits could cost Bank of America $4 billion

Bank of America could eventually be forced to pony up $4.2 billion in legal settlements connected to the Libor-rigging scandal, according to analysts with Keefe, Bruyette and Woods.

In a research note published Tuesday, the investment firm analysts speculate on the potential liability of big banks that help determine the key interest rate in the wake of Barclays' $450 million settlement of charges that its employees manipulated the Libor rate, keeping it artificially low. A number of other banks have disclosed that they, too, are under investigation.

Bank of America has not been identified as being under investigation for falsifying Libor submissions, but the Charlotte bank is a defendant in a civil suit brought by Charles Schwab making similar allegations.

KBW's liability estimates are based on the dollar value of derivatives each bank holds that are tied to Libor.

JPMorgan Chase could be on the hook for $4.8 billion, the analysts estimate, and Citigroup could pay $3.1 billion. The industry as a whole could make $35 billion in settlements.

The analysts pointed out, however, that the burden of proof against these banks will be difficult to meet, and say it will likely be tied up in the legal system for five to eight years.

Goldman building private bank

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

Private bank. Goldman Sachs is quietly building an in-house bank to lend money to wealthy people and companies, the Wall Street Journal reports. The new unit will also lend more directly to corporations. Meanwhile, the New York securities firm reported this morning its profit fell 11 percent in the second quarter amid continued economic troubles.

Libor. A top British official said discussions with American authorities during the financial crisis of 2008 focused on ways to improve Libor -- not warnings about the rate-rigging scandal, the New York Times reports. Adding to probes by U.S. and U.K. authorities, attorneys general in at least five states are now conducting investigations tied to alleged manipulation of the rate, too, Bloomberg reports.

Risk remains. Investors see big banks as riskier than before the financial crisis and "probably always will," Reuters writes, citing a report from Moody's Analytics. The report from the sister company of the bond-rating agency said risk premiums for bank debt are "highly unlikely ever to return to their former levels."

Stocks advance. U.S. stocks climbed this morning as investors bet Fed Chairman Ben Bernanke will hint at more stimulus during his testimony to Congress, Bloomberg reports. Bernanke will deliver his semi-annual report on the economy and monetary policy before Congress today and tomorrow.

Bank of Commerce stays profitable

Charlotte-based Bank of Commerce remained profitable in the second quarter, earning $116,000 for shareholders as the bank set aside less for loan losses, the bank said Tuesday.

That compares with a loss of $268,000 in the same time period last year. The small commercial bank earned $48,000 in the first quarter of 2012, reversing three straight quarterly losses.

"We have worked diligently to return the Bank to profitability," CEO Wes Sturges said in a statement. "We have improved asset quality, enhanced our capital position and have begun to see increased lending activity."

Monday, July 16, 2012

BofA sees profit for traders in obesity rise

Bank of America Merrill Lynch trading strategists say the rise in obesity around the world and efforts to fight it are a big opportunity for investors to make money in stocks, according to a report released Monday.

With the number of obese people rising to more than 500 million and counting, and health care expenses treating them rising as well, the bank has identified 50 stocks that could benefit in four main categories:  pharmaceuticals and health care; food; weight loss, dieting and nutrition; and sports apparel and equipment.

Drug companies stand to benefit from an increase in obesity-fighting medicine as well as a rise in obesity-related illnesses like diabetes and kidney failure, the report says.

Food companies responding well to increases in government pressure to cut down on fat and sugar get a nod as well. Weight-loss and dieting firms command a $4 billion market in the U.S. and growing.

In a longer-term play, the report says, investors could begin looking at sportswear and sports equipment companies as governments encourage people to get more exercise.

“Global obesity is a mega-investment theme for the next 25 years and beyond," equity strategist Sarbjit Nahal said in a statement. "Obesity may be the most pressing health challenge facing the world today and efforts to tackle it will shape thinking by policy makers and in boardrooms around the world.”

Convenience stores oppose credit card settlement, want swipe fee cap

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

Credit card deal. Retailers will now be able to charge credit card customers an extra fee, and Visa, MasterCard and big banks have to pay $6.6 billion to merchants as part of a legal settlement announced last week, but convenience stores are against the deal, the Wall Street Journal reports. They want a more permanent cap on credit card swipe fees.

Libor conspiracy? Individual banks were able to influence the key Libor interest rate enough to boost their own profits without necessarily conspiring with other banks, traders say, according to Bloomberg. Flaws in how the rate is calculated allow a single bank to manipulate the rate, meaning the Libor scandal that ousted top executives at Barclays may not involve other banks as regulators have suspected.

Hedge fund advantage. Hedge funds are getting early indications that analysts are changing their views on a company's earnings potential, using surveys to trade on the information before the reports come out, The New York Times says. Some of them have stated in documents that they're after nonpublic information.

Citigroup profit. Citigroup, reporting its earnings Monday, said it earned just under $3 billion, or 95 cents per share, Bloomberg reports. That's 12 percent down from a year ago, but beat analysts expectations. M&A activity helped offset trading declines.

Friday, July 13, 2012

JPM's trading losses reach $5.8 billion

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

Earnings. Big banks kicked off their earnings season this morning, with Wells Fargo reporting another quarter of record results. JPMorgan Chase & Co., meanwhile, saw second-quarter earnings fall 8.7 percent on a double-digit revenue decline and a $4.4 billion trading loss, the Wall Street Journal reports. Losses on the bank's "London Whale" trading blunder have reached $5.8 billion, the Journal writes.

London Whale. The JPMorgan trader known as the "London Whale" has left the bank, Reuters reports, citing a source familiar with the situation. Bruno Iksil, whose risky bets made him the focus as the bank reported its multibillion-dollar trading loss, was widely expected to depart.

Libor. A dozen global banks linked to the Libor scandal could face up to $22 billion in regulatory penalties and other costs, according to Morgan Stanley estimates, the Financial Times reports. That analysis assumes that 11 banks in addition to Barclays will be penalized in the rate-rigging scandal.

Economic improvement. Experts predict the economy will improve slightly in coming months, citing falling oil prices and improvement in automobiles, housing and other sectors, the New York Times writes. Economists say growth is likely to pick up through the summer and into the fall, though the pace will remain sluggish.

Stock futures climb. U.S. stock futures rose this morning amid speculation that policy makers will boost stimulus measures, Bloomberg reports.

Thursday, July 12, 2012

New site helps banks unload foreclosures

The N.C. Bankers Association has started a website meant to help lenders across the state unload their inventory of foreclosures.

The site, REOdeedwagon.com, allows banks to post listings of the houses, land and commercial properties they own as a result of foreclosure or forfeiture. Launched this spring, the website gives banks a channel to promote those properties and consumers an easy way to search listings from multiple lenders, bankers association spokesman Brandon Wright said.

"It never pays for those properties to sit and be vacant," he said. "It's a win-win."

The association is expanding the effort to Georgia and Nevada with the help of bankers groups in those states and hopes to bring more states on board in coming months, Wright said.

Banks pay a nominal fee to post properties. The site is free for potential home buyers, offering detailed property descriptions, photos, prices and contact information for the broker or banker managing the sale. So far, 30 of North Carolina's roughly 130 banks have signed up, with about 240 listings on the site, Wright said.

Bankers group critiques probe into Wells Fargo discrimination

The American Bankers Association put out a statement Thursday criticizing the U.S. Justice Department's investigation into whether banks discriminated against black and Hispanic borrowers, saying it could cause banks to scale back lending.

The Justice Department settled claims with Wells Fargo on Thursday that the bank steered minority homebuyers into costlier mortgages than white buyers, based on race instead of creditworthiness. Wells will pay $175 million.

While not specifically naming Wells Fargo, the ABA statement says "This approach can have unintended consequences, such as causing financial institutions to shrink their operations rather than risk litigation," according to the statement, attributed to ABA President Frank Keating. 

"Overly aggressive regimes can make a bank reluctant to lend, hurting the very groups they intend to help. The banking industry is committed to a color-blind, discrimination-free lending environment."

Could a credit card surcharge be coming?

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

Credit card surcharge. Merchants are pushing for a rule change that would allow them to impose a 2.5 percent to 3 percent surcharge on customers who use credit cards to help cover swipe fees, the Wall Street Journal reports. Visa and MasterCard currently ban such surcharges, but the industry is currently facing numerous lawsuits seeking to overturn them. Credit card swipe fees have been rising even as the Dodd-Frank financial reform law capped debit card swipe fees. 

Inexperienced regulators at JPM. The New York Fed's decision to replace its 40-odd regulators in mid-2011 left the regulation team inexperienced and could have contributed to their failure to see an impending multi-billion-dollar trading loss, The New York Times says. They could not "ask the tough questions," one former regulator told the Times.

Jobless claims, stock futures down. Despite a report that initial jobless claims in the U.S. were down more than expected, stocks are pointed down as well, the Wall Street Journal reports. The Financial Times says it's because global central banks are not moving to quell investor fears.

Bank bonds up. Bond prices at U.S. banks are up big this year, rising more than any other industry and being led by Bank of America, Bloomberg reports. The 8 percent gains are a stark departure from last year's paltry bond price rise. Investors are drawn to yields still slightly higher than industrials and strengthening balance sheets.

Wednesday, July 11, 2012

Wells economic outlook: Slow growth, uncertainty continue

The economic recovery so far this year has "indeed lived down to our modest expectations," Wells Fargo & Co. economists said in a report released today.

After a gain of 3 percent in the fourth quarter last year, the economy has grown just 1.7 percent in the first half of 2012. That sluggish pace is likely for the second half of the year, too, Wells said in its latest monthly economic outlook.

"The economy continues to grow, but the pace of growth is not enough to satisfy job expectations by households, the profits of investors or the public purse at all levels of government," the report said. "For decision-makers, the challenge remains to find an operational guideline in an economy of modest positive growth with neither boom nor bust."

There have been positive signs in personal consumption, equipment and software spending and residential construction, but in each case, the gains were weaker than expected, the economists found. Meanwhile, net exports and federal and local government spending continue to hamper growth.

The global economy has lost momentum, too, with China registering the slowest growth rate in three years and many European countries slipping back into recession. Wells economists predict the global economy will grow about 3 percent this year, the slowest since 2009, provided Europe does not "blow up," they wrote.

In a worst-case scenario in the euro zone, another global financial crisis could occur, the report said. Uncertainty is likely to continue in the coming months, but ultimately "in our view, the most likely scenario is one of 'muddle through,'" the economists said.

Clawbacks expected for JPMorgan execs after trading blunder

Welcome to the morning roundup. Here's a look at today's banking and finance headlines.

Clawbacks. JPMorgan Chase & Co. intends to reclaim millions of dollars in stock from executives involved in the New York bank's massive trading loss, including former Chief Investment Officer Ina Drew, the Wall Street Journal reports, citing people familiar with the situation.The Journal reports that the bank could disclose those plans as early as Friday, when it reports its second-quarter results.

Trading firm bankruptcy. Peregrine Financial Group Inc. has filed to liquidate in bankruptcy after regulators sued the futures brokerage, alleging a $200 million shortfall in client funds, Bloomberg reports. A U.S. district court judge issued an order freezing the firm's assets, saying there was "good cause" to believe Peregrine and its founder - hospitalized after a suicide attempt - violated federal law.

Barclays. British lawmakers accused former Barclays CEO Bob Diamond of misleading a parliamentary inquiry into the Libor rate-fixing scandal, Reuters reports. Diamond, who was forced to resign and give up bonuses worth as much as $30 million, called the comments "unfair and unfounded."

Libor fallout. Baltimore officials say the city's troubles during the recession were aggravated by bankers' manipulation of Libor, the rate linked to money the city had borrowed, the New York Times reports. Baltimore has brought the complaints to federal court in New York - and now, other cities, states and municipal agencies are weighing similar action, the Times writes.

Job losses. A new report shows 3.5 million jobs have been lost in Europe since the 2008 financial crisis, and 4.5 million are still at risk, CNBC reports. Euro zone unemployment now stands at 11 percent, representing a total of 17.4 million people, the report said.

Tuesday, July 10, 2012

BofA cutting commercial banking jobs

Bank of America Corp. is cutting jobs in its commercial banking unit as part of the latest round of its wide-ranging efficiency initiative, Project New BAC, sources familiar with the situation told the Observer Tuesday.

The cuts, first reported by Reuters, involve the unit that makes loans to mid-sized companies around the country, occurring even as officials at the Charlotte-based bank have eyed growth in that business. It's not clear how many jobs are being eliminated overall or whether any of the cuts are occurring in Charlotte.

Sources told the Observer the cuts affected a small percentage of the commercial banking unit and were not concentrated in any one office.

Bank spokesman Jefferson George said in a statement Tuesday that Bank of America will continue to make strategic hires in growth areas.

"We regularly review our businesses to ensure we're best positioned to meet client needs and capture market opportunities as they develop," he said.

Bank of America, the nation's second-largest lender by assets, has been streamlining operations and selling off non-core assets as part of the Project New BAC cost-cutting initiative. Last year, the bank said it was eliminating 30,000 jobs over the next few years under the effort's first phase, which targeted consumer banking and other parts of the business.

The bank is expected to provide more details about the second phase of Project New BAC, which will include cutbacks in its commercial banking, investment banking, wealth management and other divisions, when it reports earnings July 18.

Bank of America's headcount was down by about 10,000 workers in the first quarter of 2012 from the same period the year before.

Another record quarter of profits for Wells Fargo expected

Analysts expect Wells Fargo will post another record-setting quarter of profits when the bank announces its second quarter earnings Friday, according to a research note from analysts at Barclays.

Wells will again join JPMorgan Chase as the first banks to report earnings for the quarter. The consensus is that Wells will report earnings of 81 cents per share, or about $4.3 billion. That would be up from 75 cents per share, or about $4 billion, in the first quarter.

Of late, Wells Fargo has been expanding its loan portfolio, organically and through acquisitions, and has been raking in mortgage fees through the wave of refinancing.

The San Francisco bank has posted record-setting quarterly profits since 2010.

U.S. likely at 'maximum employment,' Richmond Fed president says

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

U.S. at 'maximum employment.' Richmond Fed president Jeff Lacker says the country could be near the "maximum employment" point beyond which monetary policy can't spur more jobs, Bloomberg reports. The unemployment rate remains elevated at 8.2 percent in the U.S., but Lacker believes there's not much more the Federal Reserve can do. He's dissented on the last four Fed decisions.

Bank swaps. Big banks could soon have to put up extra money and trade swaps through a clearinghouse, as set out in Dodd-Frank, the Wall Street Journal reports. Regulators could vote on a rule today. It's intended to add more transparency to the derivatives market.

ATM 'vigilantes.' Banks are trying to get a law changed that requires banks to display notices on ATMs that noncustomers could be charged fees both on the screen and with a physical notice on or around the machine. The industry says it's allowing people to seek out ATMs with a missing notice sticker and then file a lawsuit, or to remove the sticker themselves and sue, The New York Times says. A couple in Michigan has reportedly filed dozens of lawsuits.

Barclays bonuses. Former Barclays CEO Bob Diamond has given up about $31 million in bonuses as British regulators continue to pressure the bank after settling charges that it rigged the Libor interest rate, the Wall Street Journal reports. Diamond and chairman Marcus Agius were forced to resign.

JPM risk. After JPMorgan Chase's $2 billion-plus trading losses, regulators are likely to begin requiring more information about how banks calculate risk, Bloomberg says. JPMorgan changed its risk formula earlier in the year without telling investors, originally shielding the mounting losses.

Monday, July 9, 2012

Earnings season brings worries of weak results

Welcome to the morning roundup. Here's a look at today's banking and finance headlines.

Earnings. Companies begin reporting second-quarter earnings this week, and many have already warned investors that profits will be lower than expected, the Wall Street Journal reports. That's due in part to slowing demand from customers, particularly in Europe. JPMorgan Chase & Co. and Wells Fargo & Co. are set to report results Friday, with Charlotte-based Bank of America to follow next week.

Barclays. The focus in the Barclays rate-rigging scandal turns to regulators today, the New York Times reports. Paul Tucker, a deputy governor at the Bank of England, is set to give evidence on whether senior government officials pressured Barclays to lower its Libor submissions.

Community banks. More than 800 community banks lend less than half their deposits, far below the rate of their peers, Reuters reports, suggesting not all small banks live up to their reputation as "kinder, gentler versions of their big-bank brethren."

Drug cartel used BofA accounts. A Mexican cocaine-trafficking cartel used Bank of America Corp. accounts to invest money in a U.S. horse-racing operation, the Wall Street Journal reports. The ties between the violent Los Zetas drug gang and the Charlotte bank were described in an affidavit filed in federal court last month, the Journal writes. Bank of America hasn't been accused of any wrongdoing.

Bankers lose on their own firms. Workers at the five largest Wall Street banks saw the value of company stock in their 401(k) accounts, sometimes the biggest holding in those plans, fall more than $2 billion last year, Bloomberg reports.

Friday, July 6, 2012

Mel Watt's then-chief of staff referred to Countrywide VIP unit

Joyce Brayboy, who served as U.S. Rep. Mel Watt's chief of staff for 12 years, was one of a number of staffers connected with the House Financial Services Committee to be referred to Countrywide's special VIP  lending unit, according to a House report released Thursday.

The VIP program was used to give special service and discounts to people in positions of power and other friends of then Countrywide CEO Angelo Mozilo, including numerous members of Congress.

Countrywide lobbyist Jimmie Williams, who referred to himself as a "personal friend" of Brayboy, directed her to the VIP unit in 2004 when she was looking for an adjustable rate loan. At the time, she was Watt's chief of staff. Williams also routinely directed Congressmen to the VIP unit.

Williams told a Countrywide staffer to handle Brayboy's loan "carefully," saying that she "reports directly to Congressman Mel Watt who introduced predatory lending legislation to address unscrupulous lending practices, and they do view Countrywide as a trusted advisor," according to an email turned up in the House investigation.

Brayboy did not end up getting a loan from Countrywide. 

Brayboy worked for Watt from 1995 to 2007. She now works for Goldman Sachs as a lobbyist.

2:30 p.m. Friday update: Watt said Friday that he had not seen the report and was not aware of the House's investigation, so he did not want to comment on it. He also said that Brayboy was not dealing with financial services issues at the time.

"If this report was like most government oversight reports, it's more about speculation than fact anyway," he said.

Judge orders JPM to explain withholding emails

Welcome to the morning roundup. Here's a look at today's banking and finance headlines.

JPM. A U.S. judge has ordered JPMorgan Chase & Co. to explain why it should not be forced to turn over internal e-mails as part of a probe into whether it manipulated electricity markets in California and the Midwest, Reuters reports. The bank has until July 13 to submit an explanation as to why the court should not enforce a subpoena from the Federal Energy Regulatory Commission.

Central banks. Global stock markets fell on Thursday despite actions by central banks to shore up major economies, CNBC writes. That suggests there isn't much policymakers can to do stem what some are calling a "global synchronized slowdown."

Economic struggles. U.S. employers added just 80,000 jobs in June, the latest month of weak hiring, driving stock futures down this morning. Meanwhile, while the U.S. unemployment rate remained flat at 8.2 percent in June, a broader measure, which counts underemployed workers, rose to 14.9 percent, the Wall Street Journal reports.

Barclays. A Bloomberg opinion piece poses the question: if Barclays would lie about its borrowing costs, what else would it lie about? The question comes after an interest rate-rigging scandal that has sapped the British bank's credibility and torn through its top ranks.

Thursday, July 5, 2012

Foreclosure review too complicated to be effective, agency says

The "independent foreclosure review" mandated in a settlement with Bank of America, Wells Fargo and a number of other banks has not been effective because the process to seek a review is too complex, a government watchdog agency reported Thursday.

People whose homes were in foreclosure in 2009 or 2010 are eligible for an independent review of their case if they felt they were mistreated by one of a number of mortgage servicers. They were mandated as part of a settlement reached in April 2011.

About 4.5 million people were sent letters, but the response rate has been only about 5 percent.

The Government Accountability Office said that is in part because no consumer groups were consulted on the process and the letters were written above the average U.S. reading level, possibly making them "too complex to be widely understood."

The letters also did not give specific information on how borrowers who were wronged could be compensated, the GAO report states.

The GAO recommended that the IndependentForeclosureReview.com site be updated with clearer language and more information on compensation for borrowers. It also said servicers should analyze trends on who is responding to the review and reach out to groups not responding in large numbers.

The OCC and the Federal Reserve said they are taking more steps to reach out to eligible borrowers. The deadline to apply for a review was extended last month to last through September.

Libor rigging scandal could spread to U.S. banks

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

Libor scandal could spread. A day after recently resigned Barclays chief executive Bob Diamond faced hostile questions from the British parliament, fears are growing that settlements could be coming from the dozen other banks under investigation for fudging numbers used to set the Libor interest rate, the Wall Street Journal reports. Bank of America and Citigroup are among the U.S. banks under investigation, but the Charlotte bank isn't saying whether it has set aside money for the possibility of a penalty, Bloomberg reports. The scandal has also put the the British bank's new U.S. wealth management unit in jeopardy, Reuters says. It's been billed as an alternative to offerings from Bank of America and most directly competes with JPMorgan Chase and Goldman Sachs.

ECB cuts rate. As expected, the European Central Bank cut its primary interest rate by 25 basis points this morning, The New York Times says. The next step is likely to be government bond purchases similar to quantitative easing in the U.S. Unexpectedly, China also cut interest rates today amid a slowing economy, the Times says.

Eminent domain. Some California cities say they are considering using eminent domain powers to seize underwater mortgages, cut principal and restructure them, and resell them, the Wall Street Journal reports. It is unclear whether this is legal, but the cities say they have a good case. Investors say this would only hurt the housing market, not help it, by increasing borrowing costs.

Fee disclosures. A number of banks, including Bank of America, have indicated they plan to adopt a simpler way of disclosing checking account fees, the Boston Globe reports. The model form was published by the Pew Charitable Trusts several months back. 

Tuesday, July 3, 2012

Barclays CEO resigns after rigged-rate scandal

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

Barclays. Barclays CEO Robert Diamond has resigned after the British bank agreed to a multimillion-dollar fine to settle findings that it had tried to rig benchmark interest rates. The Associated Press writes that in the days since the bank was fined more than $450 million, its CEO "came to symbolize everything wrong with international banking."

JPM. Current and former brokers at JPMorgan Chase & Co. said the bank emphasized its sales over its clients' needs, the New York Times reports. The financial advisers said they were encouraged to push JPMorgan's own products even when competitors had better-performing or cheaper options.

BlackRock acquisition. Asset manager BlackRock Inc. will buy Swiss Re Ltd.'s Private Equity Partners AG to extend its investments into infrastructure, Bloomberg reports. Swiss Re's $7.5 billion European PE and infrastructure unit will be integrated with BlackRock's existing business. BlackRock was once part of Charlotte-based Bank of America Corp. The bank shed its stake in the firm as it worked to streamline operations and sell off non-core businesses.

Housing market. Private equity firm Blackstone Group has spent more than $250 million this year buying foreclosed homes with the intention of renting them out, people with knowledge of the effort told Bloomberg. The goal is to acquire enough assets to take public as a real estate investment trust or sell to another company, the sources said.

Stocks flat. U.S. stocks opened flat this morning ahead of the Independence Day holiday, Reuters writes.

Monday, July 2, 2012

Outsourcing firm opens lending, servicing office in Charlotte

Indecomm Global Services, which helps companies outsource business process functions around the world, has opened a lending and mortgage servicing office in Charlotte, the company announced Monday.

The facility will be able to handle loan set-up, processing, underwriting and closing, and is a response to higher demand from banks looking to cut costs and save time while dealing with new mortgage regulations, the company's financial services division president, Rajan Nair, said in a statement.

Two of the nation's top 10 lenders already have services set up for Indecomm's Charlotte office.

The Charlotte facility will be the company's largest on the East Coast. It has several other locations in the U.S. and offices in India, London, Singapore, Australia and the Philippines.

'Near-shoring' moves bank jobs from New York to RTP

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

'Near-shoring' moves jobs. Big banks are increasingly moving mid-level jobs from centers like New York City and London to lower-cost locations, including RTP in North CarolinaThe New York Times reports. Known as "near-shoring," the practice targets jobs that need to stay in the U.S. but don't necessarily need to be in the big cities, like accounting, human resources and legal support. Low-level jobs have already moved overseas.

Living wills due today. The "living wills" the country's largest banks are required to submit outlining how they could be broken apart if necessary are due today to the FDIC. A version of the reports for the nine largest banks -- including Bank of America -- will be made public tomorrow, Bloomberg says. The wills are required under Dodd-Frank, and a total of 125 banks will have to submit them by the end of 2013.

Barclays chairman resigns. Barclays chairman Marcus Agius announced his resignation this morning in the wake of the Libor-fixing settlement that cost the British bank $450 million, CNN reports. The bank's CEO, Bob Diamond, is also under pressure to resign, and the pair will face questions from parliament this week.

Can women save banks? Former Bank of America Merrill Lynch head Sallie Krawcheck has a new op-ed, this time touting women's skills in interpersonal relationships, risk-averse nature and long-term goal setting and how these qualities could serve the banking industry. She writes that a true conversation on diversity hasn't taken place in finance.

States changing foreclosure rules. Bills are pending in half of U.S. states to change the rules for how foreclosures can proceed, the Wall Street Journal reports, as a reaction to the practices exposed in the $25 billion national mortgage servicing settlement. One bill, in New York, would make it a crime to forge foreclosure paperwork.

Chinese banks most profitable. China's banks accounted for a third of global banking profit in 2011, CNBC reports, and three of the country's banks were the world's most profitable, according to rankings from The Banker magazine. JPMorgan chase was the most profitable U.S. bank and came in fourth. Bank of America came in first in The Banker's ranking of banks most able to lend on a large scale.

Malaysia boom. Bank of America, Goldman Sachs and JPMorgan Chase are among the banks cashing in on the boom in investment banking activity in Malaysia, Reuters reports. The country's share of Asian mergers and acquisition activity has doubled this year.