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American Express Q3 EPS up YOY; Wells Fargo settles race, gender bias labor case

American Express Co. reported third-quarter net income of $1.76 billion, or $2.08 per share, up from $1.65 billion, or $1.88 per share, in the year-ago period.

Citizens Financial Group Inc., Synchrony Financial and State Street Corp. have also released their third-quarter financial results.

Goldman Sachs Group Inc. may still reach a settlement with the Malaysian government over its 1MDB fund fraud case even when the criminal trial begins at the Magistrate Court on Oct. 22, Nikkei Asian Review reports, citing Malaysian Attorney-General Tommy Thomas. The parties already had two rounds of talks, simultaneously tackling both the criminal charges and the settlement negotiations. The Malaysian government is asking Goldman Sachs to pay $3.3 billion for allegedly helping a Malaysian businessman loot the state-backed 1MDB fund. In June, Malaysian Prime Minister Mahathir Mohamad belittled the U.S. bank's $239 million offer to settle the case.

At home, Goldman Sachs appears to be scrimping on employees' salaries as the company scales up on technology, CNBC reports. The bank has so far earmarked 35% of its revenue for staff compensation and benefits this year, the lowest in at least the past decade, the news outlet reports, adding CFO Stephen Scherr is expecting the proportion to further decline as the company banks on automation and grows its platform-driven businesses. Goldman plans to invest about $200 million in its securities division technology in the next three years, mainly to hire people with coding knowledge, Reuters reports, citing a person familiar with the matter.

It seems like the Federal Reserve is now allowing U.S. banks to hold on to more Treasury debts and less cash after a spike in the repo markets in September, Reuters reports, citing industry sources. The softer regulatory stance comes after heightened calls from banks and after the volatile movement of overnight lending rates last month.

Home BancShares Inc. Chairman Johnny Allison, on his company's third-quarter earnings call Oct. 17, delivered a stark warning to his fellow bankers, calling some of his peers "stupid" for offering certain loan terms. Allison said some lenders have dropped rates by 150 basis points to 200 basis points during the time the Federal Reserve has dropped its key rate by 50 basis points. He also invoked the 2008 financial crisis, saying the high leverage and nonrecourse provisions commonplace today were "things that we saw back before the '08 crash."

The U.S. Department of Labor's Office of Contract Compliance Programs has entered into a conciliation agreement with Wells Fargo & Co. to settle charges of race and gender discrimination against the bank. OFCCP found that the bank discriminated against more than 2,300 women and African-American applicants for online customer service and phone banking in Arizona, Virginia and Utah in 2014. While not admitting liability, Wells Fargo agreed to pay $603,612 in back wages, interest and benefits to the applicants, make a total of 66 job offers to the original applicants, and at the same time train its hiring managers to avoid similar labor violations.

Kansas City, Mo.-based CCB Financial Corp., the holding company of Country Club Bank, agreed to acquire Bank of the Prairie in Olathe, Kan., in a deal expected to be completed in early 2020. Financial terms of the transaction were not publicly disclosed.

Portland, Ore.-based Umpqua Holdings Corp. will close more bank branches in 2020 as part of its cost-saving efforts to prop up earnings amid declining interest rates, President and CEO Cort O'Haver told analysts on the company's third-quarter earnings call Oct. 17. The company has targeted 65 branches for closures since the third quarter of 2017 as part of its "operational excellence" initiative, which includes consolidation of branches, reorganizing some internal functions and investing in digital offerings to grow revenues.

M&T Bank Corp.'s expenses for 2019 are growing faster than initial forecasts due to growth in its mortgage business and increased technology investments, CFO Darren King said. On his company's third-quarter earnings call, King said the year's higher-than-anticipated expenses are "very atypical" for M&T Bank, attributing these to the bank's higher expenses with its mortgage servicing and subservicing acquisitions and compensation expenses related to strong mortgage originations.

Amid a wave of M&A speculation after it gave into the pressure of zero-commission bandwagon, E*TRADE Financial Corp. is willing to consider a deal as it plots its path forward, though executives expect the online broker to be more competitive in a free-trading landscape.

Charles Schwab Corp. will soon introduce fractional-share trading capabilities on its platform in a bid to draw in younger customers, The Wall Street Journal reported, citing an interview with Chairman Charles Schwab. The San Francisco-based online brokerage wants to become the first major U.S. online brokerage to offer the ability to buy into high-priced stocks such as those of Alphabet Inc., Berkshire Hathaway Inc. and Mastercard Inc. without needing thousands of dollars to do so.

In other parts of the world

Asia-Pacific: Barrick's Q3'19 gold output rises; Pangaea Investment ups First Quantum stake

Europe: LSE reports Q3; HSBC may trim equities biz; Credit Suisse negative rates

Middle East & Africa: Emirates NBD launches rights issue; Morocco's BCP buys 71% of Madagascar bank

Now featured on S&P Global Market Intelligence

State-run banks in California could attract deposits now held at national banks: Public banks, a rarity in the U.S., could become more common with the passage of a new California law.

The day ahead

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

In Asia, the Hang Seng was down 0.48% to 26,719.58, while the Nikkei 225 rose 0.18% to 22,492.68.

In Europe, around midday, the FTSE 100 was up 0.02% to 7,184.10, while the Euronext 100 was down 0.24% to 1,093.13.

On the macro front

The leading indicators 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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