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State Street books 68% growth in Q4'19 EPS; Goldman, BlackRock eye China JVs


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State Street books 68% growth in Q4'19 EPS; Goldman, BlackRock eye China JVs

State Street Corp. reported fourth-quarter 2019 net income of $704 million, or $1.73 per share, up from $437 million, or $1.03 per share, in the year-ago quarter.

Regions Financial Corp. reported net income available to common shareholders of $366 million, or 38 cents per share, in the fourth quarter of 2019, compared with $390 million, or 37 cents per share, in the year-ago period.

Citizens Financial Group Inc. posted net income available to common shareholders of $427 million, or 98 cents per share, in the fourth quarter of 2019, compared with $450 million, or 96 cents per share, in the year-ago period.

Goldman Sachs & Co. LLC and global investment manager BlackRock Inc. are in talks to separately establish wealth management joint ventures in China after the country announced eased rules on foreign ownership in 2019, Caixin reported Jan. 17, citing separate sources close to the matter. Goldman Sachs is reportedly in talks with the wealth management division of Industrial & Commercial Bank of China Ltd. to launch a new asset management partnership where the U.S. bank will have a 51% stake. BlackRock and Singapore's Temasek Holdings (Pte.) Ltd. are said to have signed a nonbinding agreement with China Construction Bank Corp.'s wealth management unit for a new joint venture.

Bank of America Corp. is reorganizing its fixed-income trading division, forming two new units out of its existing trading desks and installing changes in senior leadership, Business Insider reports, citing an internal memo from Jim DeMare and Bernie Mensah, co-heads of fixed income, currencies and commodities. The bank is reportedly retooling its credit trading operation, combining its global developed and emerging credit trading franchises. Frank Kotsen, the bank's global head of credit and special situations, is leaving the company as part of the changes.

Bank of America Private Bank, formerly U.S. Trust, is scaling up its adviser workforce to focus on high-net-worth clients, Reuters reports, citing an interview with Katy Knox, president of Bank of America's private banking arm. According to Knox, the BofA unit intends to double the adviser headcount from 2014 levels to 600 and expand to 40 markets from 20 in 2017. The private bank's wealth division, which serves people with at least $3 million to invest, added 64% more households in 2019, recording $288 billion in assets under management, Reuters notes.

Morgan Stanley plans to add more staff, about 30 to 35 private bankers, to its wealth business in Hong Kong and Singapore, where the bank sees rich clients are getting more bullish, Bloomberg News reports, citing Asia-Pacific wealth head Vincent Chui's interview with Bloomberg Television in Hong Kong. Morgan Stanley's wealth business makes up more than half of its revenue, helping the bank's record profit in 2019.

The White House confirmed that U.S. President Donald Trump intends to nominate Judy Shelton and Christopher Waller as members of the Federal Reserve's Board of Governors. Shelton, who most recently served as U.S. executive director at the European Bank for Reconstruction and Development, would sit on the Fed board until Jan. 31, 2024. Waller, who is executive vice president and director of research at the Federal Reserve Bank of St. Louis, would end his term at the Board on Jan. 31, 2030.

Home BancShares Inc. Chairman, President and CEO John Allison expects to announce a deal within the next month. He disclosed the bid as part of the question-and-answer session of the company's fourth-quarter 2019 earnings call on Jan. 16. On other larger deals, Allison said it seems like a good time to be looking for acquisitions, and the bank expects to be "back in M&A business" this year or next.

Bridgeport, Conn.-based People's United Financial Inc. is anticipating a net interest margin of 3.0% to 3.1% in 2020, down from 3.14% in 2019, management said on the bank's 2019 fourth-quarter earnings call. The bank plans to grow loans between 2% and 4%, excluding runoff from select portfolios of recently acquired United Financial Bancorp Inc. and the transactional portion of its New York multifamily portfolio. The bank is inclined to expand through de novo branches and acquisitions.

The Colorado State Banking Board denied Cache Bank & Trust permission to sell its assets to Elevations CU following calls for the regulator to scrutinize the legality of the sale. The ruling touches on a nationwide trend as credit unions have increasingly become bank buyers, raising objections from bankers that credit unions have an unfair tax advantage. Opponents of the Elevations-Cache deal pointed to Colorado's statute, arguing that banks can only sell assets to other banks and the board appeared to find the argument convincing.

Private equity firm TA Associates Management LP has engaged Raymond James to seek potential buyers for Omaha, Neb.-based Orion Advisor Solutions, sources told Barron's. Orion, formerly known as NorthStar Financial Services Group LLC, is expected to sell for nearly $1.88 billion. TA Associates acquired a majority stake in Orion in 2015.

In other parts of the world

Asia-Pacific: Ant Financial said to revive IPO; Indian bank plans regulatory action exit

Europe: Danske Estonia probe widens; ING sees defeat in Italy; Erste rules out mBank bid

Middle East & Africa: South Africa cuts key rate; Al Hilal Bank to sell Islamic insurance ops

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Blank-check IPO proceeds hit new record in 2019 as Wall Street buys in: A new generation of more ambitious blank-check companies is drawing interest as its credibility rises on Wall Street.

Visa's $5.3B acquisition of Plaid seen boosting bank-fintech partnerships: One payment processing startup should expect an uptick in business following its acquisition by Visa Inc.

C&I loan growth sputters in fourth quarter, H.8 data shows: Commercial banks' loans and leases increased by just 4.4% year over year in December 2019 due to weakness in commercial-and-industrial lending, according to the Federal Reserve's latest estimate of commercial banks' seasonally adjusted balance sheets.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng rose 0.60% to 29,056.42, and the Nikkei 225 rose 0.45% to 24,041.26.

In Europe, around midday, the FTSE 100 was up 0.92% to 7,679.82, and the Euronext 100 was up 0.76% to 1,168.04.

On the macro front

The housing starts report, the industrial production report, the consumer sentiment report, the JOLTS report and the Baker-Hughes Rig Count report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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