Wells Fargo faces mortgage bias suit; big banks take $4.6B hit in ECM revenues

TOP NEWS IN BANKING & FINANCIAL SERVICES

* Wells Fargo & Co. is facing a proposed class-action lawsuit claiming that the bank denied Black homeowners lower interest rates in their refinancing applications and forced them to pay more to borrow money, Bloomberg News reported, citing the complaint filed in federal court in San Francisco. The "redlining" complaint follows the news outlet's reporting from federal mortgage data, saying Wells approved only 47% of Black homeowners' refinancing applications in 2020, compared with 72% of white homeowners' applications. Democratic lawmakers also want to probe the bank's refinancing process to see if it violates existing laws.

* Recent market volatility weighed down Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp., The Goldman Sachs Group Inc. and Citigroup Inc.'s equity capital market revenues, with the banks posting an aggregate of $645 million in fees from equity raisings so far in 2022, compared with $5.3 billion they made in the same period in 2021, the Financial Times reported, citing data provider Dealogic. The $4.6 billion revenue hit has stemmed from the uncertainties brought by the Russia-Ukraine conflict, poor post-listing performances and rising interest rates, according to the report.

➤ Major Chinese bank profits to likely fall YOY in Q4'21 as economy slows

Some of China's largest state-run banks are set to report earnings declines for the fourth quarter of 2021 as the teetering property market dragged down economic growth and credit demand.

➤ UAE banks set for increasing profits amid rising rates – S&P

Banks in the United Arab Emirates may see profits return to pre-pandemic levels by next year amid rising interest rates.

READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.

BANKING

* Texas Republican lawmaker Briscoe Cain sent a cease-and-desist letter to Citigroup warning the bank that it could be shut out from underwriting municipal bonds and that its staff could face criminal prosecution unless it terminates coverage of elective abortions in its employee benefit plans, Bloomberg reported, citing a series of tweets from Cain. Cain reportedly does not have legal authority to carry out the actions he warned about in his letter.

* Banking giants JPMorgan and Bank of America are among companies that will meet with President Joe Biden's administration today to discuss the Russia-Ukraine conflict and the U.S. government's sanctions on Russia, an unnamed source told Bloomberg.

* Amalgamated Investments Co. may seek compensatory damages from Amalgamated Financial Corp. over allegations that the latter breached a previous merger agreement between the companies, according to a regulatory filing. Amalgamated Financial in February withdrew its application for regulatory approval for the deal due to an inability to obtain such approval. Amalgamated Financial said in the filing that it denies the breach allegations and intends to vigorously defend any such claims by Amalgamated Investments.

FINANCIAL SERVICES

* JPMorgan, Tiger Global Management LLC's long-time lender, called in more banks to help leverage the increased demand of the investment firm after its net-asset-value loans rose to about $4 billion in 2021, Bloomberg reported. Assets at Tiger's venture capital arm tripled to around $65 billion, according to the report.

* Traders at Goldman Sachs have been offering to trade nickel contracts at a discount of about 32% compared with London Metal Exchange's prices, Bloomberg reported, citing people familiar with the matter. Goldman's proposals imply a bid price of $25,000 a ton and an offer price of about $37,000 a ton.

* In other news, Goldman paid its chief legal officer and general counsel, Kathryn Ruemmler, $17.5 million for 2021 and granted her a $9.6 million stock bonus for the same year. Ruemmler, who replaced Karen Seymour last year, is in charge of the company's 1MDB-related remediation program, according to a proxy filing.

* Starting in July, Equifax Inc., Experian PLC and TransUnion will remove almost 70% of medical debt in collection accounts from credit reports and also plan to erase unpaid medical debts of less than $500 in the first half of 2023, The Wall Street Journal reported, citing people familiar with the matter.

* FactSet Research Systems Inc. is discontinuing all commercial operations and delivery of products and services to clients inside Russia in light of the country's conflict with Ukraine. The company also said it is engaging with its customers outside Russia that depend on its solutions and services in the country.

Click here for a summary of indexes on the S&P Capital IQ Pro platform.

The Daily Dose is updated as of 8 a.m. ET. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.