US Banker articles from March 2008

US Banker archives from March 2008

This Month.
March 1, 2008... 26 Cover Story: The Politics of Lending Few would have guessed that the banking sector would be center stage for presidential politics in 2008, but it is. Thats because the subprime-mortgage crisis has spilled over into a crumbling economy...

Correction.(Correction notice)
March 1, 2008... In Word Is (January 2008), U.S. Banker incorrectly reported the sum that Pacific Coast National Bank spent on setting up a temporary branch in Fallbrook, CA, due to an incorrect figure provided by Agility Recovery Solutions. The figure was...

Bedeviled by Regulation? It Cuts Both Ways.: Bankers have long complained about the costs and burdens associated with regulation. Given these challenging times and the backlash for shareholders, it may be that regulation contributed to the problem.(Viewpoint essay)
March 1, 2008... When I think about bank regulation lately, I find myself quipping, A penny for Sandy Weills thoughts. Indeed, many industry players might like the chance to talk to the man responsible for the merger of Travelers and Citibank in 1998, a deal...

M&A: Recession or Not, BofA Deal Recommits to Consumer: Countrywide deal nicely timed with rate cuts.(mergers and acquisitions)(Bank of America Corp.)(Countrywide Financial Corp.)
March 1, 2008... Theres an old saying that its better to be lucky than smart. Kenneth Lewis, Bank of Americas acquisitive-minded chairman and CEO, may have the good fortune of being both. Just weeks after BofA agreed to purchase Countrywide Financial for a...

Scene and Heard.(Brief article)
March 1, 2008... In 2007, sales of new homes fell by 26 percent, the steepest drop since record-keeping began in 1963. The U.S. Commerce Department in a late January comment on the problems in the housing sector. We believe that total losses for...

Mortgages: Citi Revamping Links Origination, Securitization: Industry rivals are closely watching the reorganization.(Citigroup Inc.)
March 1, 2008... The ramifications of CitiGroups $18 billion in losses in subprime-mortgage-related exposure has forced a sweeping corporate reorganization that tightens the risk-management relationship between origination and capital-markets activity. By...

Wall Street Banks Go Greener with Principles on Power Sector.
March 1, 2008... Urged on by shareholders and customers increasingly green attitudes, three of the worlds top financial institutions have released The Carbon Principles: climate-change guidelines for advisors and lenders to U.S. coal and other greenhouse...

Noted and Noteworthy.(case against Wachovia Corp.)(Brief article)
March 1, 2008... A lawsuit against Wachovia claims it continued to offer banking services to telemarketers, who used those services to steal as much as $400 million from victims, many elderly, since 2003, even after the bank was warned about the fraud. Filed in...

Is the OTS Obsolete?: A perennial question returns to the forefront with BofA's bid to buy Countrywide Financial, one of the nation's largest thrifts. And the cynics sigh: "Let the agency-bashing begin.".
March 1, 2008... In the growing groundswell to reorganize the six federal financial-services regulators, the Office of Thrift Supervision is the smallest and the agency most vulnerable to elimination, particularly with Countrywides acquisition by Bank of...

Risk Management: The Complex Role Of CRO Is Reexamined: Chief risk officers are overseeing a sea change in risk strategies at institutions across the nation, redefining their roles and challenging institutions like never before.
March 1, 2008... Being a chief risk officer isnt easy these days, considering the mix of credit, security and regulatory woes that would give any official heartburn. It feels worse right now because its been so, so good for the past few years, says Suzanne...

Would Rewards Help Your Client Feel Better?: The subprime debacle has left many consumers antsy. Some banks are trying merchant-funded-rewards programs to tempt clients into loving their banks again.
March 1, 2008... You cant pick up a major daily without stumbling over at least one article about credit woes and bank losses. But rather than run away from the overwhelmingly negative news, bank-marketing firms are trying to spin an upside message, using...

AD Beat: 'Chasing What Matters' Doesn't Matter Much: JPMorgan Chase's new campaign is expensive and, well, ordinary. Though glossy, it lacks the humor, pizzazz or warmth of its rivals' best efforts. But will consumers care?
March 1, 2008... JPMorgan Chase claims to know what its customers want. But its new branding campaign, the first ever produced to support seven lines of business, doesnt provide any of the humor, pizzazz or warmth of its rivals campaigns. But is that necessary...

The Politics of Lending: The subprime mortgage crisis, and its role in the looming recession, is turning the banking industry into campaign fodder. Can banks dodge new rules-and the blame-while also being honest with themselves?
March 1, 2008... It was merely a moment in the heat of the presidential primary campaign, but one that spoke volumes about the potential role of the subprime mortgage mess on this years elections. In a pre-Super Tuesday debate where the Republican presidential...

2007: The Year Of the Silent Scream: The banking sector's biggest players remain stuck in the muck. The path out to solid ground is going to require a long hard slog.
March 1, 2008... The banking-sector recession showed up clearly in U.S. Bankers annual ranking of the top 100 institutions by three-year average return on equity. The numbers are stark: 83 percent of the top 100 banks showed a decline in ROE in 2007 from 2006,...

Peer Pressure: Best of the Biggest.
March 1, 2008... {Ranked by 3-Year Average ROE} Rank/Institution Total Assets ($000) Market Value ($M) Closing Price($) ROE (%) 2007 ROE (%) 2006 ROE (%) 2005 3YR Avg. ROE (%) Net Interest Margin (%) Net Income ($000) Total Non-Interest Income...

Surviving The 2007 Financial Crisis: Countrywide, Merrill, UBS, Morgan, Citi. The marquee names hit hard by the credit-market storm prompted the SNL Bank Index's 25 percent slide from its historic high in late 2006. Where does the industry go from here? Here's an action plan to survive the challenges and capitalize on market opportunities.(Industry overview)
March 1, 2008... One can hardly pick up a newspaper or watch a business news program today without seeing mention of the subprime-mortgage problem or the collateralized-debt-obligation meltdown and their impact on U.S. banks, consumers and the U.S. economy....

Bankers Bemoan Elimination Of Popular Merit Program: Community bankers can't understand why the popular Merit program has been scrapped, but the FDIC says the program was no longer useful and sometimes tied examiners' hands.
March 1, 2008... If one has timea good amount of timeask any community banker about his last federal examination. Chances are he has a horror story to tell, unless his bank is part of an elite group examined under the so-called Merit program. Given the...

Reverse Mortgages Move Into the Mainstream: Paltry savings, impending retirements and huge equity buildups-yes, even with the housing slump-mean more seniors will be tapping their homes for income. Banks are stepping in.
March 1, 2008... Whether as a last resort to keep ones house or to finance a Mediterranean trip reverse mortgages are increasingly enticing seniors in want of additional income. Reverse mortgages, otherwise known as home-equity conversion mortgages, are on...

Customize Fees and Make Customers Feel Special: National City has adopted an SOA-enabled, silo-busting pricing strategy based on a customer's total business with the bank to deepen the relationship. Guess what? It works.
March 1, 2008... Bank fees have long been a one-size-fits all jacket, but some institutions now offer a custom-tailored experience to differentiate themselves and grab wallet share. Weve been moving away from a product and line-of-business focused culture...

Bringing the Customer 'Onboard' in the Early Days: By using onboarding techniques, banks are not only keeping their small-business customers, but making them ultra-profitable. But they only have a limited time to cross sell. Tick tock. Tick tock.
March 1, 2008... In any relationship, the first three months are crucial. Mess something up early and there is little chance of long-term success. Thats just as true for a newly dating couple as it is for another partnership: a bank and its new customer. ...

Another Lending Sector Teeters on the Edge: Signs of trouble in the residential-construction-lending market are quickly emerging, and many community banks are on the hook. The next big question: How will commercial construction fare?
March 1, 2008... Like a bad virus, the subprime-mortgage-driven plague is spreading from one sector of banking to another. Construction loans that fund large residential projects like subdivisions and condominiums are the latest to feel the bite; after years of...

Great, Great Grandkids: Until Their Death Do We Part: Once the exclusive domain of the ultra-wealthy, the dynasty trust is going mainstream. Banks see gold not only in aiding the affluent to use this technique, but to remain attached in perpetuity as trustee.
March 1, 2008... Banks are realizing that the dynasty trust, that multigenerational, flexible, tax-avoidance technique ever more popular in wealth-management circles, is surprisingly well-suited to the kind of long-term trusteeship at which they excel. ...

Stimulus Package? Americans Need to Save.: The stimulus package won't heal the ailing economy. Policymakers could take a more novel approach to fixing the problem: Require banks to lend responsibly and encourage Americans to save more.
March 1, 2008... At last, the $168 billion stimulus package is nearly a done deal. But what will it accomplish? Not much. Except for a round of back-slapping for the politicians, few industry observers expect a $300 to $1,200 check per qualified taxpayer will...

SOX Relief for Smaller Banks.(Sarbanes-Oxley act of 2002)
March 1, 2008... There is no question that the Sarbanes-Oxley act of 2002 has been tough on banks, and perhaps rightfully so. Headlines of bad corporate behavior and greedy executives have likely persuaded most companies that promoting good governance concepts...