Major US banks have posted stellar Q1 earnings reports this week, driven largely by capital markets and dealmaking business. Federal Reserve data shows the appetite for credit among consumers and small businesses remained generally low during the quarter, but there are some indications it could revive soon.
Bernard Madoff, architect of a Ponzi scheme that proved to be the largest investment fraud in US history, has died at age 82. Madoff was serving a 150-year prison term for his scam, which defrauded an estimated 37,000 people of as much as $65 billion.
BlackRock's new US Carbon Transition Readiness ETF marked the biggest exchange-traded fund debut on record last week with $1.25 billion of inflows. However, with Apple, Microsoft, Amazon, Alphabet and Facebook comprising its top holdings, the fund is very similar to other ESG and big tech-themed ETFs.
Sustainability has become a top priority among banks and the industry is reaching an inflection point on how addresses the issue, writes Christof Innig, global head of sustainable banking at Accenture. Innig offers a five-point checklist for banks to consider in their efforts to engage the issue.
Federal Reserve researchers attribute the global rise in personal saving to the coronavirus crisis and the government support that accompanied it, particularly in the US where much of the financial relief went directly to households. Now that the crisis is fading, a consumer spending surge would be beneficial to the overall economy but the researchers play down that likelihood, noting: "There is only so much pop that pent-up demand for services such as travel, restaurant meals, and entertainment can deliver."
In separate lawsuits in the UK and US, former JPMorgan traders involved in a US Justice Department investigation into possible market manipulation are suing the bank. They say they were dismissed unfairly and are asking to be rehired.
Banks' legacy systems are "impeding their ability to move forward" and are the top concern of the Federal Deposit Insurance Corp., said chair Jelena McWilliams, who spoke at the Consumer Bankers Association's virtual conference. The FDIC is considering a program to certify technical firms that can partner with banks to improve their technology.
JPMorgan Chase saw a 9% increase in customers' debit and credit card spending during the first quarter, compared to the same period last year. Piper Sandler analyst Jeff Harte notes that "historically when people spend more on their credit cards, they tend to start carrying more debt on those credit cards, so that's when we would see a pickup in loan growth follow."
PNC Financial Services Group Chief Executive Bill Demchak said he wants PNC to be "fourth, fifth or sixth" in market share as the consumer banking sector becomes more consolidated. The bank's new Low Cash Mode digital program is part of a shift to service-oriented offerings that will help the bank compete with fintechs.
Some 67% of retailers are offering contactless payment options after the coronavirus pandemic drove up consumer demand for such services, according to the State of Retail Payments study from the National Retail Federation. However, merchants are increasingly concerned about the additional fees that accompany the new services, according to Leon Buck, NRF vice president for government relations, banking and financial services.
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