| August 23, 2012
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Today's Top Stories
1. Citigroup is already a little broken up
2. Goldman Sachs expects fiscal mess
3. Bank of America winds down credit protection
4. Wall Street salaries to decline in 2012
5. Malaysian IPO market stands out Also Noted: Kaseya
Spotlight On... Bank strike looms in India
Wells Fargo invests in clean energy; Home sales strong in July and much more... News From the Fierce Network:
1. Failure of the cybersecurity law a bad sign
2. Pfizer's FCPA settlement signals more to come
3. Rethinking the traditional password
| Sponsor: The Mobile Wallet Summit FierceLive! Webinars > Controls for automated trading. Can you rely on the sell-side alone? Wednesday, August 29th, 11 am ET / 8 am PT
> Webinar: Network Security: Emerging threats require updated Best Practices- September 12, 2pm ET/ 11am PT
Events > Investment Consultants Forum - The Crowne Plaza Times Square, New York, NY - March 2, 2012
> NFC Ticketing Europe 2012 - March 20-21 - London
> NYIF Essentials of Project and Infrastructure Finance - September 10-12 - New York, NY
> Investment Trends Summit - September 12-14, 2012 - The Four Seasons, The Biltmore - Santa Barbara, CA
> Investment Trends Summit - September 12-14, 2012 - Santa Barbara, CA
> NYIF Core Skills Analyst Program - October 22- November 16 - New York, NY
> NYIF Wealth Management Program - October 29- November 16 - St. Petersburg/Tampa FL
> NFC Payments USA Unites NFC Experts in Boston Once Again - October 29-30 - Boston, MA
> The Mobile Wallet Summit - November 28-29 - London
Marketplace > Get Subscriptions to the Leading Finance Magazines for FREE
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* General ad info: Click here | Today's Top News 1. Citigroup is already a little broken up Sandy Weill, the man who built the modern Citigroup, now says that big banks perhaps should be broken up. So, how did that go over with current Citigroup management? The idea was predictably shot down, but CEO Vikram Pandit did make an interesting point as he disavowed his predecessor's advice. Pandit told the Financial Times that the bank essentially had already gone back to the basics of banking, and aside from some global markets businesses had sold most of the units from the major deals created by Weill. "What's left here is essentially the old Citicorp," he was quoted. "That's a tried and proven strategy. Why did it work? Because it was a strategy based upon operating the business and serving clients and not a strategy based on dealmaking. That's the fundamental difference." With Pandit at the helm, the bank has been pushing through the sale of $600 billion in assets and 60 different businesses. That qualifies not as a break up but as sort of a break down into business lines that Pandit is confident will succeed, with perhaps a little bit of synergy linking them all. Similar sentiment might be expressed for other big banks. In Citigroup's case, the big bet is on international growth. "Pandit said the emergence of new corporate champions outside the developed world and their trade and investment in other emerging markets was likely to lead to the bank seeing the share of its business from emerging markets increase from near 50 per cent, where it stands currently, to become the majority." For more:
- here's the article Related articles:
Banks must address break up ferver
Many ex-executives now favor bank break ups Read more about: Citigroup, Bank break ups
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2. Goldman Sachs expects fiscal mess To the real cynics out there, a bearish report on equities from Goldman Sachs signals a massive short position held by the bank. Whether you believe that or not, it's fair to say that at least David Kostin, Goldman Sachs Chief U.S. Equity Strategist, believes that the firm's clients need to get flat in equities or get burned badly. If Goldman Sachs itself has taken a massive short proprietary position, which will not be legal for much longer, it's all the more reason to ponder whether we're in for a fiscal-cliff inspired 12 percent meltdown in stocks, as Kostin believes. Some might be more inspired to get on the bear bandwagon if the scenario weren't so tightly linked to one issue: The budgetary "sequestration" that is scheduled to occur if Congress cannot pass a budget this year. My sense is that the threat will remain a potent political tool between now and the elections. After the elections, I fully expect Congress to come to its senses and pass some sort of compromises that steers the country clear of the fiscal cliff, albeit without really solving any of the real debt issues. Still, for people who think Congress and the federal government in general have lapsed into extreme dysfunction, there's an easy way to put their money on the line. The likelihood of sequestration perhaps hasn't yet been baked into market valuations, which are high right now. For more:
- here's the article Read more about: Goldman Sachs
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3. Bank of America winds down credit protection Bank of America has decided to wind down two revenue-generating consumer programs that have been pilloried by regulators. Specifically, the bank will end its Credit Protection Plus and Credit Protection Deluxe, which give customers the right to suspend payments selectively (they were marketed as an individual safety net), to new customers this month, though it will continuing to offer the service to existing cardholders who have signed up. Fees typically range from 85 cents to $1.35 per $100 of outstanding balance each month for these programs. According to Dow Jones, Bank of America charged 85 cents for every $100 of customer's balance. The bank has already agreed to pay $20 million to settle a class-action lawsuit alleging it mis-marketed payment-protection products to customers who didn't really need them. The move also comes on the heel of the CFPB's $210 million settlement with Capital One over similar products. Other banks, such as JPMorgan Chase, have already stopped these programs, also called debt-cancellation programs. These programs collectively generated nearly $3.0 billion in revenue in 2009. The move by Bank of America highlights the on-going consumer banking revenue conundrum. Regulations have taken a toll on the top line. The Durbin Amendment stands as the best example of this. There could be more regulation-driven revenue challenges ahead, especially as the CFPB turns its attentions to credit cards. Banks need to innovate to offset the revenue losses, but few have been able to do so. The question remains: what's next? For more:
- here's the article Read more about: Bank of America, Credit Protection
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4. Wall Street salaries to decline in 2012 The pattern over the past few years has been for Wall Street banks to fare decently in the first half of the year, only to see the momentum dissipate in the second half. As of now, it looks like that pattern will hold for 2012. With banks struggling with revenue issues, consultants are reducing 2012 expected paychecks for employees. Bloomberg notes the views of Johnson Associates that Incentive pay for senior management, excluding the top executives, will be unchanged to 10 percent higher. That's down from May, when the firm predicted senior managers would get bonus boosts of 5 percent to 15 percent. In equities, "bonuses will increase between 5 percent and 15 percent, down from the 10 percent to 15 percent estimate in May. Investment bankers may see bonuses fall as much as 10 percent or rise as much as 5 percent … , while in May the declines were expected to be limited to 5 percent. Bonuses for some asset managers and prime brokers will be unchanged to 10 percent higher, compared with a predicted increase in May of 5 percent to 10 percent." Somewhat surprisingly, the "biggest increases are still likely to come in fixed- income and is now forecast to be 10 percent to 20 percent instead of 15 percent to 25 percent, the new report showed." While these predictions make sense, you never know what will transpire in the markets. Deals could make a strong comeback and the trading environment is always unpredictable. It's always a half-empty/half-full environment on Wall Street these days. Low expectations may be a good survival technique. For more:
- here's the article Related articles:
Bankers not having fun these days Read more about: executive compensation, pay
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5. Malaysian IPO market stands out So which IPO market has proven to be the most active? Surprisingly enough, Malaysia now ranks as the world's hot spot. While the IPO market has been middling in many of the major financial centers, especially in Asia, the Malaysian market has been on fire. So far this year, Malaysia hosted two of the three biggest IPOs in the world: Felda Global Ventures Holdings and IHH Healthcare, which together were valued at more than $5 billion. The aftermarket has also been strong. According to Bank of America Merrill Lynch, since the beginning of the year, IPOs valued over $300 million in Malaysia have registered an average 19 percent return to date. Over the same time, IPOs elsewhere in Asia of the same size are currently traded down by approximately 10 per cent. "Malaysia at the moment is the sweet spot for IPO equity issuance globally. In a period of challenging markets and elevated volatility, Malaysia has stood out as a strong, stable, and liquid market that will support high quality companies seeking to list in the country," One Bank of America Merrill Lynch was quoted by local media. The bank expects 10 to 15 more "sizeable" IPOs coming within a year and a half. Westports Malaysia, for example, is pondering whether it should go public. One differentiating factor in this market is the role of Miti (Ministry of International Trade and Industry), which tends to be a large stable owner of companies aiming to go public. Government-backed funds tend to be active in these IPOs. For more:
- here's the article Related articles:
Current dotcom bubble never really inflated
U.S. back on top in IPOs Read more about: IPO
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Also Noted | This week's sponsor is Kaseya. |  | Ten Effective Habits of Indispensable IT Departments
It's no secret that responsibilities are growing while budgets continue to shrink. Enact these ten IT habits throughout your financial institution to help you cut costs, create operational efficiencies and align IT to business goals. Download Today!
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SPOTLIGHT ON... Bank strike looms in India Could this happen in the United States? Unions are planning a two-day work outage for bank employees in India, to oppose various reforms by the government. Is this a wise move. Here in the U.S., bank critics have been highly successful with other protest tactics, and asking bank employees to stay off the job is tantamount to saying they should volunteer for staff layoffs. I just can't see it happening. Article Company News:
> Citigroup expands in credit sales and trading. Article
> Wells Fargo defends mortgage market share. Article
> Deutsche Bank exec to DTCC. Article
> Icahn pulls bid for CVR shares. Article
> Warrenn Buffett, a trader? Article
> Wells Fargo invests in clean energy. Article
Industry News:
> Mass exodus: sell-side credit markets to hedge funds. Article
> Sounds banks see lower profits. Article
> More on the fiscal cliff recession. Article
> Home sales strong in July. Article
> Apple stock signaling a reversal? Article
> Empire State IPO challenged. Article
Regulatory News:
> RBS in crosshairs over Iran. Article
And Finally…Facebook suckers? Article > Controls for automated trading. Can you rely on the sell-side alone? Wednesday, August 29th, 11 am ET / 8 am PT Join us for this informative and thought-provoking webinar, lead by renowned Capital Markets expert Richard Bentley, VP of Capital Markets, Progress Software . And learn how you can better mitigate and manage the risk of automated trading. Register today! > Webinar: Network Security: Emerging threats require updated Best Practices- September 12, 2pm ET/ 11am PT The security picture at financial services seems to be getting cloudier by the day. While many banks have awoken to the risks imposed by possible network breaches, the landscape continues to morph, raising the stakes. Cyber criminals continue to refine their techniques and to develop more advance hacking methods to compromise corporate networks, and they are as sophisticated as ever. The very notion of Best Practices in the realm of network management and security continues to evolve. We take a look at current trends and up-to-date practices. Register today!
| > Investment Consultants Forum - The Crowne Plaza Times Square, New York, NY - March 2, 2012 This conference provides a unique environment for developing dialogue between plan sponsors, managers and consultants. This event will feature panel-driven discussions focused on specific investment techniques of fixed income and hedge fund managers, the evolving role of institutional consultants, the manager evaluation process and more. Register today. > NFC Ticketing Europe 2012 - March 20-21 - London Come and join MasterCard, Renfe, Deutsche Bahn, Visa Europe, Orange, Arriva Netherlands, O2 and many more for the first event to bring together the whole NFC Ticketing industry for discussion, debate and quality networking. Click here. > NYIF Essentials of Project and Infrastructure Finance - September 10-12 - New York, NY This is a practical course that provides executives, whether as financiers, sponsors, or professional support, an opportunity to understand the risk-return character of limited recourse projects from multiple perspectives. Case studies span a variety of sectors and geographical regions. This course will not use in-depth models involving Excel™, but the instructor (a broad-based finance and investment executive with global experience throughout the U.S., Europe and the emerging markets of Latin America and Asia who has negotiated numerous transactions, including mergers and acquisitions, public offerings, mezzanine financings, international bank syndications, corporate valuations and fairness opinions) will review modeling approaches with examples. Register today. > Investment Trends Summit - September 12-14, 2012 - The Four Seasons, The Biltmore - Santa Barbara, CA The Investment Trends Summit is an educational forum focused on analyzing trends for the future, and exploring ways to implement new strategies in investment plans. Speakers and attendees will discuss topics such as investor's perspectives, investment management theories, and more. Register Today! > Investment Trends Summit - September 12-14, 2012 - Santa Barbara, CA Opal Financial Group's Investment Trends Summit will serve as an educational forum focused on analyzing trends for the future, as well as exploring ways to implement new strategies in particular investment plans. As one of our Platinum Series Events, we have designed this investment trends conference to meet the needs of money managers, senior pension fund officers and trustees who prefer smaller, more structured programs. By limiting this event to select managers, participants will be able to more carefully examine a distinct set of topics specifically tailored to their interests. > NYIF Core Skills Analyst Program - October 22- November 16 - New York, NY Bringing together core finance concepts and theories, this program is a challenging and rewarding experience for entry-level analysts, finance and investment professionals seeking to enhance their skill set. Real-life case studies supplement the hands-on learning experience, providing a wealth of practical knowledge to take back to the workplace. The program provides four weeks of intensive training in accounting (optional), corporate finance, credit risk and financial modeling. Register today. > NYIF Wealth Management Program - October 29- November 16 - St. Petersburg/Tampa FL The 3-week Program captures the best practices and insights from corporate thought leaders and wealth management firms. This modular suite of classes is designed to prepare client-facing professionals with the knowledge and skills to meet and add value to wealthy individuals and families. The Program explores the following topics: Global Economic Impact on Wealth, Consultative Discussions and Recommendations, Asset Allocation and Portfolio Optimization, Lending and Leverage, Tax and Intergenerational Planning, and Maintaining Good Relationships with Investment Clients. Register today. > NFC Payments USA Unites NFC Experts in Boston Once Again - October 29-30 - Boston, MA NFC Payments USA (Oct 29-30th)is back for its second year, hosting 150 senior level delegates to debate industry challenges and facilitate the roll out of NFC payments. Speakers include Best Buy, PayPal, Verizon, Barclaycard, T-Mobile, Best Buy, VISA, Capital One, MasterCard. Click here for more information. > The Mobile Wallet Summit - November 28-29 - London The Mobile Wallet Summit is the only show that looks at the future of mobile transactions. It brings together every industry you find in your physical wallet, loyalty, identity, ticketing and payments and provides a forum for debate on how they will fit on your mobile.
| > Get Subscriptions to the Leading Finance Magazines for FREE Mercury Magazines offers top Finance titles for Free to professionals. No Credit Card Required. Stay Ahead in your Industry. Sign up now. > Whitepaper: Using Modern CRM to Attract and Retain Advisors and Clients Learn how this “next generation” CRM delivers game-changing benefits over early CRM options and can help your organization attract and retain top tier talent, foster customer loyalty, and grow assets under management or increase share of wallet/household. Download here. > Whitepaper: Ten Effective Habits of Indispensable IT Departments It's no secret that responsibilities are growing while budgets continue to shrink. Enact these ten IT habits throughout your financial institution to help you cut costs, create operational efficiencies and align IT to business goals. Download Today! | ©2012 FierceMarkets This email was sent to kumaresan.selva.blogger@gmail.com as part of the FierceFinance email list which is administered by FierceMarkets, 1900 L Street NW, Suite 400, Washington, DC 20036, (202) 628-8778.
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