Wells Fargo Fined US$185 Million Over Account Openings

Wells Fargo Fined US$185 Million Over Account Openings

Wells Fargo & Co was fined $185 million for illegal sales practices that included opening as many as two million deposit and credit card account without any customers knowledge. Employees issued debit cards without customers’ knowledge and assigned personal identification numbers without telling them. They  transferred funds from authorised customer accounts to temporarily funds one without customer permission. Some allegedly created fake email address to enrol unknowing consumers or people who don’t exist in online banking to hit sales goals.

“Wells Fargo & Co was fined $185 million for illegal sales practices that included opening as many as two million deposit and credit card account without any customers knowledge.”

~Wall Street Journal

As such, Wells Fargo said it terminated approximately 5300 employees and managers over a five year period for their involvement with the unauthorised accounts.

Related Reports: Wall Street Journal, Forbes

 

About Wells Fargo

In 1852, Henry Wells and William Fargo founded Wells, Fargo & Co. to serve the West. The new company offered banking (buying gold and selling paper bank drafts as good as gold) and express (rapid delivery of the gold and anything else valuable).

Wells Fargo opened for business in the gold rush port of San Francisco, and soon Wells Fargo’s agents opened offices in the other new cities and mining camps of the West. In the boom and bust economy of the 1850s, Wells Fargo earned a reputation of trust by dealing rapidly and responsibly with people’s money. In the 1860s, it earned everlasting fame — and its corporate symbol — with the grand adventure of the overland stagecoach line.

Visit: Wells Fargo


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Europe Bankers Set to Lose $2.5 Billion of Bonuses in Stock Rout

Europe Bankers Set to Lose $2.5 Billion of Bonuses in Stock Rout

Investment bankers at Europe’s securities firms have been watching their bonuses decline. A rout in financial stocks this year has wiped more than $2.5 billion from the value of deferred shares that were paid as bonuses in the past few years at Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG and UBS Group AG.

“Awards for staff at Credit Suisse have plunged by more than 1.2 billion Swiss francs ($1.2 billion).”

~Bloomberg

Awards for staff at Credit Suisse have plunged by more than 1.2 billion Swiss francs ($1.2 billion) on a 42 percent drop in shares this year. Bonuses have fallen across Wall Street’s largest firms as revenue shrank.

Related Reports: Bloomberg, Wealth X

 

About Credit Suisse

Founded in 1856, we today have a global reach with operations in over 50 countries and 48,200 employees from over 150 different nations. Our broad footprint helps us to generate a geographically balanced stream of revenues and net new assets and allows us to capture growth opportunities around the world. We serve our clients through three regionally focused divisions: Swiss Universal Bank, International Wealth Management and Asia Pacific. These regional businesses are supported by two other divisions specializing in investment banking capabilities: Global Markets and Investment Banking & Capital Markets. The Strategic Resolution Unit consolidates the remaining portfolios from the former non-strategic units plus additional businesses and positions that do not fit with our strategic direction. Our business divisions cooperate closely to provide holistic financial solutions, including innovative products and specially tailored advice.

Visit: Credit Suisse

 


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Agricultural Bank of China Plans to Raise $12 Billion Over Three Years

Agricultural Bank of China Plans to Raise $12 Billion Over Three Years

Agricultural Bank of China said it will sell as much as 80 billion yuan ($12 billion) of Tier-2 securities over the next three years. This announcement came after it inched out a 0.5% increase in second quarter profit from a year ago and China Citic Bank Corp., on Thursday announced plans to raise as much as 40 billion yuan by selling convertible bonds.

“Agricultural Bank of China said it will sell as much as 80 billion yuan ($12 billion) of Tier-2 securities over the next three years.”

~Bloomberg

China lenders are grappling with their weakest profit growth in more than a decade and a pileup of bad debt after flooding the financial system with cheap credit for years.

Related Reports: Bloomberg

About Agricultural Bank of China

The predecessor of the Bank is Agricultural Cooperative Bank, established in 1951. Since the late 1970s, the Bank has evolved from a state-owned specialized bank to a wholly state-owned commercial bank and subsequently a state-controlled commercial bank. The Bank was restructured into a joint stock limited liability company in January 2009. In July 2010, the Bank was listed on both the Shanghai Stock Exchange and the Hong Kong Stock Exchange, which marked the completion of our transformation into a public shareholding commercial bank.

Visit: Agricultural Bank of China

 


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China Uncovers $30 billion worth of Illegal Banking Activity

China Uncovers $30 billion worth of Illegal Banking Activity

China police have uncovered $30 billion worth of illegal banking activity, involving 158 cases of underground banks and money laundering.  A special task force launched by the Ministry of Public Security, central bank and foreign exchange regulator showed illegal banking services in 192 locations.

“China police have uncovered $30 billion worth of illegal banking activity, involving 158 cases of underground banks and money laundering.”

~ CNBC

China has had reports of rogue managers of P2P – shadow banking platforms – and has been criticized by local and overseas investors for being soft on money laundering, prompting authorities to take action. The crackdown included the investigation on the country’s biggest underground banking case that handled $64 billion worth of illegal transactions.

Related Reports: CNBC, Reuters

 

About Ministry of Public Security China

The Ministry of Public Security (MPS) is the principal police and security authority of the People’s Republic of China and the government agency that exercises oversight over and is ultimately responsible for day-to-day law enforcement. It is headed by the Minister of Public Security. Prior to 1954, it was known as the Ministry of Public Security of the Central People’s Government. The Ministry operates the system of Public Security Bureaus, which are broadly the equivalent of police forces or police stations in other countries. The candidate for the minister of the MPS is nominated by the Premier of the People’s Republic of China and approved by the National People’s Congress.

Visit: Ministry of Public Security

 


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ANZ to Review its Retail Unit in Asia

ANZ to Review its Retail Unit in Asia

Australia and New Zealand (ANZ) Banking Group is reviewing the company’s retail operations in Asia as it tries to slash costs and increase returns.  The move is expected to strengthen the bank’s balance sheet and help it to meet capital rules that Australia and global regulators are enforcing.

“The review was part of a reshaping of the Asian strategy that includes exiting the commercial business and focusing on its core in debt capital markets, syndicated loans and trading.”

~ Reuters

The review was part of a reshaping of the Asian strategy that includes exiting the commercial business and focusing on its core in debt capital markets, syndicated loans and trading.  Recently, politicians have been calling for a high level public inquiry into a series of allegations of misconduct, including insurance fraud, improper wealth advice and interest rate rigging in Australian banks.

Related Reports: Business Times, Reuters

 

About ANZ

Our history dates back over 180 years. We are committed to building lasting partnerships with our customers, shareholders and communities in 34 countries in Australia, New Zealand, throughout Asia and the Pacific, and in the Middle East, Europe and America. We provide a range of banking and financial products and services to over 9 million customers. We employ over 50,000 people worldwide.

Visit: Australia & New Zealand Banking Corp

 


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Discomfort Over DBS Energy Exposure

Discomfort Over DBS Energy Exposure

Goldman Sachs Group Inc and Credit Suisse Group AG has issued reports indicating the asset quality remains a concern for DBS, with the latter firm downgrading the stock to neutral from outperform.  This comes after DBS handling of loans to Swiber Holdings failed to ease concerns that more losses could emerge. The consensus analyst rating on South East Asia’s largest bank has dropped to lowest in almost seven years.

“Goldman Sachs Group Inc and Credit Suisse Group AG has issued reports indicating the asset quality remains a concern for DBS, with the latter firm downgrading the stock to neutral from outperform.”

~ Bloomberg

Singapore banks loans to oil and gas services providers have been in the spotlight after Swiber sought to liquidate its operations after facing payment demands from its creditors. Companies that specialize in servicing oil and gas producers are suffering due to the fall in crude prices.

Related Reports: Bloomberg, Business Times

 

About Swiber Holdings

Swiber Holdings Limited (“Swiber” and together with its subsidiaries, “the Group”) is a world-class integrated offshore construction and support services provider for shallow water oil and gas field development.

The Group offers a wide range of Engineering, Procurement, Installation, and Construction (“EPIC”) services, complemented by its in-house marine support and engineering capabilities, to support the offshore field development and production activities of its international clientele base across the Asia Pacific, Middle East, Latin America and West Africa regions.

Visit: Swiber Holdings


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Barclays Reaches USD$100 million Libor Settlement

Barclays Reaches USD$100 million Libor Settlement

Barclays has reached a USD$100 million multi state settlement over charges that it manipulated the Libor and Euribor interest rate benchmarks. It is the first of several banks under investigation by US state attorney’s general to reach a settlement.

“Barclays has reached a USD$100 million multi state settlement over charges that it manipulated the Libor and Euribor interest rate benchmarks.”

~ CNBC

New York Attorney General Eric Schneiderman said that government entities and non profit organisations were defrauded of millions when they entered into swap contracts with Barclays as a result of the rate rigging. Other banks that have reached settlements in connection with Libor rate rigging include UBS, Royal Bank of Scotland, Deutsche Bank and ICAP.

Related Reports: CNBC, Reuters

 

About Barclays

Barclays UK is a personal and business banking franchise with true scale, built around our customers’ needs with innovation at its core. It comprises our UK retail banking operations, our UK consumer credit cards business, our UK-based wealth offering, and corporate banking for smaller businesses. With around 22 million retail customers, and almost one million business banking clients, we are a pre-eminent UK financial services provider. This division will become our UK ring-fenced bank by 2019.

Visit: Barclays


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Lloyds Bank to Axe 3,000 Jobs and Close 200 Branches

Lloyds Bank to Axe 3,000 Jobs and Close 200 Branches

Lloyds Bank will be axing 3,000 jobs and close 200 branches that allows it to save costs at a time when interest rates are expected to be cut after the Brexit vote.  Lloyd’s chief executive said the decision to cut jobs will save 400 million and has added that the use of branches have fallen 15% year on year.

“The decision to cut jobs will save 400 million and has added that the use of branches have fallen 15% year on year. “

~ The Guardian

Lloyds is currently being investigated by the Financial Conduct Authority over the way it handled customers having difficulty paying their mortgages. It is unable to say if is facing a penalty from the City regulator but has set aside 350m to cover the costs of mishandling customers in arrears not only with their home loans but also with unsecured debts.

Related Reports: The Guardian, BBC

 

About Financial Conduct Authority

Our strategic objective is to ensure that the relevant markets function well and our operational objectives are to:

  • Protect consumers – we secure an appropriate degree of protection for consumers.
  • Protect financial markets – we protect and enhance the integrity of the UK financial system.
  • Promote competition – we promote effective competition in the interests of consumers.

We are an independent public body funded entirely by the firms that we regulate, by charging them fees. We are accountable to the Treasury, which is responsible for the UK’s financial system, and to Parliament.

Our work and purpose is defined by the Financial Services and Markets Act 2000 (FSMA)

We work with consumer groups, trade associations and professional bodies, domestic regulators, EU legislators and a wide range of other stakeholders. With this extensive remit, we use a proportionate approach to regulation, prioritising the areas and firms which pose a higher risk to our objectives.

Visit: Financial Conduct Authority


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China Bank To Package Bad Loans Into Securities

China Bank To Package Bad Loans Into Securities

Agricultural Bank of China Ltd is planning to offload bad loans by packaging them up as asset backed securities. The bank is planning to sell securities backed by 10.7 billion yuan ($1.6 billion ) of non performing loans on the interbank bond market.  As corporate leverage soars and economic growth cools, China’s banks face a rising tide of bad loans.

“The bank is planning to sell securities backed by 10.7 billion yuan ($1.6 billion ) of non performing loans on the interbank bond market.”

~ Bloomberg

China’s efforts to get to grips with its credit woes include debt swaps for local government, proposals for banks to swap loans for equity stakes in companies and the trial of the non performing loan backed securities.

Related Reports: Bloomberg

 

About Agricultural Bank of China

The predecessor of the Bank is Agricultural Cooperative Bank, established in 1951. Since the late 1970s, the Bank has evolved from a state-owned specialized bank to a wholly state-owned commercial bank and subsequently a state-controlled commercial bank. The Bank was restructured into a joint stock limited liability company in January 2009. In July 2010, the Bank was listed on both the Shanghai Stock Exchange and the Hong Kong Stock Exchange, which marked the completion of our transformation into a public shareholding commercial bank.

Visit: Agricultural Bank of China


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Monetary Authority of Singapore to Take Action Against DBS, StanChart & UBS in 1MDB Probe

Monetary Authority of Singapore to Take Action Against DBS, StanChart & UBS in 1MDB Probe

Singapore authorities said they have found lapses in anti-money laundering controls including DBS and the Singapore branches of Standard Chartered Bank and UBS and will be taking action against them. They also added that bank accounts which belong to several individuals have been seized and dealings in properties belonging to these individuals have also been curtailed. These assets amount to S$240 million.

“Singapore authorities said they have found lapses in anti-money laundering controls including DBS and the Singapore branches of Standard Chartered Bank and UBS and will be taking action against them.”

~ Monetary Authority of Singapore

The MAS said the deficiencies at the banks were related to lapses in specific processes and by individual officers which would be met by the firm regulatory action. MAS also mentioned that the inspections did not find any pervasive weakness or staff misconduct.

Related Reports: MAS, CNBC

 


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