Friday, May 23, 2014

This Week in Bank Failures

Charged: HSBC, JPM, Credit Agricole, for colluding on euro interest rates. London-based broker ICAP was named, but charges are still pending. Credit Suisse pleaded guilty to helping its customers dodge U.S. income taxes; it is paying a $2.5 billion fine, and regulators have agreed not to cancel its banking license in the matter.

Raising capital: Deutsche Bank hopes to raise €8 billion in a stock issue. Separately, it brought in €2 billion from the sale of its Las Vegas casino and €3 billion of “contingent capital” in a bond issue. An emergency meeting of stockholders of Monte dei Paschi approved a €5 billion stock issue, probably enough to cover losses from bad loans made in recent years. The world’s oldest bank is also closing 550 branches and making other cuts. Barclays is seeking a buyer or buyers for its banking operations in Spain (with Italy, Portugal, and France to follow).

Mistakes: Target fired its head of its unprofitable Canadian operations before warning that it still could not estimate the ultimate costs of last year’s security breach. EBay has reported a user data breach of similar scale, with the data of every eBay user taken from an internal database, though so far, it thinks payment information was not leaked.

Staying put: The new U.S. head of housing policy thinks it could take more than a decade to replace Fannie Mae and Freddie Mac.

Update: I wasn’t expecting a bank closing on a holiday weekend, but there it is: Columbia Savings Bank, located in Cincinnati, Ohio, with $30 million in deposits. Indiana-based United Fidelity Bank is assuming the deposits and purchasing the assets, in the process gaining its first Ohio branch. The failed bank had been posting losses for the last eight years. Also today, state regulators closed Life Line Credit Union, with 2,000 members in Richmond, Virginia, and the NCUA transferred the member accounts to Virginia Credit Union.