Banking

JPMorgan sets July return to office work; Wells Fargo exec pay plan squeaks by

Receiving Wide Coverage …

Dis-Credit Suisse

Sen. Ron Wyden, chairman of the Senate Finance Committee, “asked Attorney General Merrick B. Garland on Tuesday for information about whether Credit Suisse continued to help rich Americans defraud the I.R.S. even after it signed a settlement agreement with the Justice Department vowing to stop the practice,” The New York Times reported. He also “asked Mr. Garland for more information about anything else that might show whether Credit Suisse executives made false statements to Congress, to the Justice Department and to the courts when it said it vowed to cooperate with U.S. government efforts to force the wealthiest Americans to pay their taxes.”

“The move by Wyden caps a punishing two months for Credit Suisse, which has been hit by the twin crises surrounding Greensill Capital and Archegos Capital,” the Financial Times said. “Last week the bank raised $1.9 billion of capital to shore up its balance sheet after reporting a $5.4 billion trading loss, its largest in a decade, tied to the collapse of Archegos.”

As if the bank doesn’t have enough to deal with, “a U.S. appeals court on Tuesday revived a lawsuit accusing Credit Suisse of causing huge losses by defrauding investors in a complex product for betting on stock market swings that lost 96% of its value in a single day,” Reuters reported. “Circuit Judge John Walker said investors could pursue claims that Credit Suisse manipulated the market for the notes while downplaying the risks in offering documents. Set Capital LLC and other investors in the proposed class action claimed they lost $1.8 billion, while the Swiss bank reaped at least $475 million in profit at their expense.”

Perhaps the bank could learn a thing or two from its crosstown rival UBS, which “surprised markets with a $774 million loss” from Archegos but also posted strong first-quarter results, The Wall Street Journal said.

“At first glance, UBS and Credit Suisse appear similar. Both combine a profitable Swiss universal bank with a sizable wealth management business that also provides clients with investment banking and asset management. UBS is only slightly larger in terms of total assets, $1.1 trillion versus $0.93 trillion. Yet Credit Suisse has shown itself to be a riskier operator. This is clear from the numbers it reports as well as its disproportionate exposure to Archegos and other recent blowups.”

Into this maelstrom comes António Horta-Osório, the Portuguese banker who will be confirmed as Credit Suisse’s chair on Friday at one of the most critical junctures in the scandal-plagued bank’s history,” the FT reports.

‘Clean exit’ helps Deustche Bank

Deutsche Bank “recorded its highest quarterly profit since 2014, thanks to a boom in bond trading, strong results in asset management and a clean exit from its exposure to the implosion of family office Archegos Capital,” the Financial Times reports. Wall Street Journal

Bitcoin in the driver’s seat

Tesla “makes more money trading bitcoin than selling cars,” the Journal reported. “The company said that it sold some of the $1.5 billion worth of bitcoin that it purchased in February, contributing $101 million to the bottom line. That is nearly a fourth of its total profit.”

Bitcoin “so far has proven to be a good decision,” said Tesla CFO Zach Kirkhorn, “adding that the company would continue to invest in crypto as a place to park excess cash,” The New York Times said. “The company’s holdings will also grow as customers start buying cars with Bitcoin.”

Financial Times

See you in the breakroom

JPMorgan Chase “told all of its U.S. bankers on Tuesday that they should start to make arrangements to be back in the office on a rotational basis by early July. JPMorgan is the first major Wall Street firm to outline a detailed schedule for the return to the office. The JPMorgan memo said each of the bank’s U.S. offices will be open to all employees starting May 17 to help them get reacquainted with office life before the official rotation schedule begins.”

“Its locations are still subject to a 50% occupancy cap in line with federal government guidelines. While vaccines will not be mandatory for people returning to the office, the company said it strongly recommends that its staff get inoculated and will provide them with relevant information and resources.”

Washington Post

All in the family

Apple plans to introduce next month the “Apple Card Family,” an “innovative new way for people to share their Apple Card, track purchases, manage spending, and build credit together with their Family Sharing group.”

“Apple believes it’s doing families a favor by allowing them to make a group exercise out of using and managing debt, including enabling parents to share Apple Card spending privileges with children as young as 13,” a skeptical Post says.

Elsewhere

Sorry, Charlie

Wells Fargo’s “executive pay plan for 2020 received backing from only about 57% of investor votes on Tuesday, a narrow win for the company and the latest evidence of tougher scrutiny shareholders have put on CEO compensation this year,” Reuters reported. CEO Charlie Scharf’s pay was cut to $20.4 million last year from $34.3 million in 2019, “but the adjustments were not enough to satisfy investors. Pending a final tally, the vote would be among the lowest for a major U.S. bank in the decade since pay votes were required.”

Wells Fargo said its directors “will take into consideration the feedback that we have heard through this process, and we will continue our engagement and dialogue with our shareholders going forward.”

Shareholder support was down substantially from last year, when the “say on pay” resolution passed with 92.5% of the vote, American Banker reported.

Quotable

“We know that many of you are excited to come back, but we also know that for some, the idea of coming back on a regular basis is a change you’ll need to manage.” — From a staff memo signed by JPMorgan Chase CEO Jamie Dimon instructing the company’s bankers to prepare for a return to the office in July.



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