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AmEx's forex payments unit under FBI, OCC probe; Citi overhauls investment bank

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AmEx's forex payments unit under FBI, OCC probe; Citi overhauls investment bank

The Federal Bureau of Investigation and the Office of the Comptroller of the Currency are investigating the pricing practices of American Express Co.'s foreign exchange international payments unit, sources told The Wall Street Journal. The payments company's unit is being accused of misrepresenting pricing to clients to get their business.

Citigroup Inc. is combining the biggest divisions of its investment bank, Financial Times reports, citing Citi President Jamie Forese. Tyler Dickson and Manolo Falco will lead the combined unit, which will be called banking, capital markets and advisory, according to the report.

U.K. lender Lloyds Banking Group PLC has dropped U.S. investment banking giant Goldman Sachs Group Inc. from the auction of a £109 billion investment contract, a source told the Financial Times. The remaining bidders in the auction dubbed "Project Swift" are New York-based BlackRock Inc. and London-based Schroders PLC according to the report.

Korea Post, which oversees $112 billion, sought Goldman Sachs to learn more about the cryptocurrency market, Bloomberg News reports. Incoming Goldman CEO David Solomon recently discussed cryptocurrencies with Korea Post President Kang Seong-ju in New York, and staff of South Korea's national postal service will meet with Goldman's cryptocurrency research team in Hong Kong at the end of the month to study digital assets, blockchain and artificial intelligence, according to the report.

On the M&A front, Sapulpa, Okla.-based American Bancorp. Inc. is buying Tulsa, Okla.-based Peoples State Bancshares Inc., according to a notice in the Tulsa World.

AG Mortgage Investment Trust Inc. is entering the single-family rental business with its $140 million deal to buy a stabilized portfolio of 1,225 single-family rental homes from funds affiliated with Connorex-Lucinda LLC.

A group of business development companies led by Ares Capital Management LLC and Apollo Investment Management L.P. is asking the Securities and Exchange Commission to exempt the BDC industry from making fee disclosures that they say discourages mutual funds and institutional investors from purchasing BDC stocks.

In litigation news, TNB USA Inc. is suing the Federal Reserve Bank of New York for allegedly refusing to open the Connecticut-based state-chartered bank's master account. TNB, which began the process to open the master account in August 2017, is asking a judge to order the New York Fed to open the master account.

In people news, Freddie Mac CEO Donald Layton plans to retire in the second half of 2019. David Brickman, who was appointed president, was identified as an internal candidate for the chief executive role.

In other regulatory news, the House Financial Services Committee will hold a hearing today titled "A Failure to Act: How a Decade without GSE Reform Has Once Again Put Taxpayers at Risk," with Housing Policy Council President Edward DeMarco among the witnesses.

And during a Chicago Council on Global Affairs event, Federal Reserve Bank of Atlanta President Raphael Bostic said the central bank should keep raising interest rates to move its policy stance to a neutral level, noting that the economy is in a "very solid position" with little sign of overheating. Bostic votes on the Federal Open Market Committee this year.

In other parts of the world

Asia Pacific: Westpac weighs financial planning arm sale; Anbang taps JPMorgan for Vivat deal

Europe: Deutsche may have stalled illicit Danske money; Commerzbank falls out of DAX

Middle East & Africa: Saudi insurers end merger talks; Bahrain's Investcorp invests in Swiss lender

Now featured on S&P Global Market Intelligence

Deposit betas are catching up with loan betas at US banks: Deposit costs are poised to rise more quickly than loan yields during the remainder of 2018, threatening margin expansion for some banks.

The day ahead

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

In Asia, the Hang Seng fell 0.99% to 26,974.82, and the Nikkei 225 was down 0.41% to 22,487.94.

In Europe, around midday, the FTSE 100 was down 0.22% to 7,367.23, and the Euronext 100 fell 0.15% to 1,031.10.

On the macro front

The Automated Data Processing Inc.'s employment report, the jobless claims report, the productivity and costs report, the Services Purchasing Managers' Index, the factory orders report, the Institute For Supply Management's nonmanufacturing index, the Energy Information Administration's natural gas and petroleum status reports, the Fed balance sheet, and the money supply 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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