Tag: Citibank

Citibank Branches Are Now Sinking This Year

Market News Daily - Citibank Branches Are Now Sinking This Year.
Market News Daily – Citibank Branches Are Now Sinking This Year | Citibank branches closing.

Citibank (NYSE:C) branches are now sinking this year as more physical locations begin to quickly close down.

“Next month a spate of new Citibank closures will take effect nationally, including three in the state of California,” reports Joel Eisenberg.

According to OCC.gov, the federal Office of the Comptroller of the Currency, the following three California-based Citibank branches are permanently closing in September:

  • 1995 41st Ave, Capitola
  • 10460 MT Gleason Ave, Tujunga
  • 41969 Big Bear Blvd, Big Bear Lake

“It should be noted additional Citibank branches, both in and outside the state per current big bank trends, are expected to shutter from October to year’s end.”

This trend has occurred amongst big banks such as Wells Fargo, JPMorgan, and Bank of America.

Wells Fargo branches have now closed by an additional 37 across the U.S. as online banking competition sweeps new customers.

Daily Mail reports that Wells Fargo has filed to close an additional 37 branches across the US, further accelerating America’s transition to automated banking.

Many Bank of America branches are also closing between October through December, with plans to close other locations during the first quarter of 2024.

I will be publishing an article detailing which banks and locations will be closing each month moving forward so make sure to sign up to the newsletter, or opt in for push notifications so you don’t miss out.

Citibank stock is currently down more than -7% this year-to-date.

The bank recently slashed AMC Entertainment’s price target to $1.55, currently up +1% this year-to-date.

The last time a distressed bank targeted the recovering movie theatre chain, they ended up filing for bankruptcy.

“The firms has faced many ups and downs over the course of my career, and its clear we have challenges that we need to urgently address now,” said Chief Financial Officer Mark Mason.

Other Recent Banking News Today

Market News Daily - Citibank Branches Are Now Sinking This Year.
Market News Daily – Citibank Branches Are Now Sinking This Year | Citibank branches closing.

Analysts are now making a painful decision to downgrade big banks, including industry leader and giant JPMorgan.

Fitch Ratings analyst warned that the U.S. banking industry has inched closer to another source of turbulence — the risk of sweeping rating downgrades on dozens of U.S. banks that could even include the likes of JPMorgan Chase, reports CNBC.

“The ratings agency cut its assessment of the industry’s health in June, a move that analyst Chris Wolfe said went largely unnoticed because it didn’t trigger downgrades on banks.

But another one-notch downgrade of the industry’s score, to A+ from AA-, would force Fitch to reevaluate ratings on each of the more than 70 U.S. banks it covers, Wolfe told CNBC in an exclusive interview at the firm’s New York headquarters.”

“If we were to move it to A+, then that would recalibrate all our financial measures and would probably translate into negative rating actions,” Wolfe said.

Last week, Moody’s downgraded 10 small and midsized banks and warned that cuts could come for another 17 lenders, including larger institutions like Truist and U.S. Bank.

Earlier this month, Fitch downgraded the U.S. long-term credit rating because of political dysfunction and growing debt loads, a move that was derided by business leaders including JPMorgan CEO Jamie Dimon, reports CNBC.

“This time, Fitch is intent on signaling to the market that bank downgrades, while not a foregone conclusion, are a real risk”, said Wolfe.

The problem created by another downgrade to A+ is that the industry’s score would then be lower than some of its top-rated lenders.

“The country’s two largest banks by assets, JPMorgan and Bank of America, would likely be cut to A+ from AA- in this scenario, since banks can’t be rated higher than the environment in which they operate.

And if top institutions like JPMorgan are cut, then Fitch would be forced to at least consider downgrades on all their peers’ ratings, according to Wolfe.

That could potentially push some weaker lenders closer to non-investment-grade status.”

Also Read: JPMorgan Now Freezes Customer Account After Whopping Withdrawal

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Market News Today - Citibank Branches Are Now Sinking This Year.
Market News Today – Citibank Branches Are Now Sinking This Year | Citibank branches closing.

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Credit Suisse Was Bailed but Clients Keep Pulling Out Money

Market News Daily: Credit Suisse Bank News Today.
Market News Daily: Credit Suisse Bank News Today.

Credit Suisse is trying to lure investments from wealthy clients in Asia by offering higher deposit rates than its competitors, Reuters has reported citing people familiar with the development.

Sources said the offers are valid until the end of this quarter and only apply to new cash deposits, not to existing portfolios.

The Swiss National Bank and Finma, the top financial regulator in Switzerland, said Credit Suisse “meets the higher capital and liquidity requirements applicable to systemically important banks.”

The regulators didn’t provide details of what type of liquidity they would offer, but said they are in very close contact with the bank.

“If regulators do not handle the Credit Suisse situation well, this will send shock waves through the whole sector,” said Joost Beaumont, head of bank research at Dutch lender ABN Amro.

Credit Suisse has been the problem child of European banking for several years.

Repeated scandals and financial losses have hammered the 166-year-old bank, which combines a wealth-management business catering to the world’s elite rich with a Wall Street investment bank. 

The bank is classified as a “systemically important financial institution” under international banking rules created after the collapse of Lehman Brothers.

Such designations require the bank to hold higher amounts of capital and to maintain plans for an orderly unwinding of its operations in case it gets into trouble. 

Like Silicon Valley Bank, Credit Suisse has suffered large deposit outflows in recent quarters.

Some local units briefly breached regulatory liquidity coverage ratios last fall.

That means they weren’t holding enough easy-to-sell assets, such as bonds, to safely cover customer withdrawals.

Top 4 Wall Street Banks See Big Losses

Wall Street’s 4 top banks just had $55 billion wiped off their market value in a single day.

Four of America’s biggest banks lost a combined $55 billion of market value in a single day as financial stocks plunged.

US bank shares took a beating amid fears of contagion effects from the turmoil at Silicon Valley Bank and Silvergate.

 JPMorgan Chase, Bank of AmericaWells Fargo and Morgan Stanley – the four most valued US lenders – saw $55 billion wiped off their combined market capitalization last Thursday, Refinitiv data show.

JPMorgan, the biggest US bank, alone saw a $22 billion tumble in its market value as its stock slid 5.41% to $130.34.

Wall Street’s Bank of America lost $16.16 billion as its share price fell 6.20% to $30.54.

Wells Fargo and Morgan Stanley saw their market capitalization drop by $10.3 billion and $6.2 billion, respectively.

Among other major US banks, Goldman Sachs and Citi also witnessed significant declines in their share prices.

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Credit Suisse Warned Investors of Potential Losses in Q4 of 2022

Market News Daily: Credit Suisse Bank News Today.
Market News Daily: Credit Suisse Bank News Today.

The SEC released Credit Suisse’s 6-K filing where the bank warns investors of potential losses due to naked short covering, more on that below.

Credit Suisse (CS) took a massive hit of $4.09 billion in Q3 and hinted at occurring losses in an upturn in markets — something we saw at the start of 2023.

The bank proceeded to hire 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster.

In a statement, the bank says, “Conversely, to the extent that we have sold assets that we do not own, or have net short positions, in any of those markets, an upturn in those markets could expose us to potentially significant losses as we attempt to cover our net short positions by acquiring assets in a rising market.

“Market fluctuations, downturns and volatility can adversely affect the fair value of our positions and our results of operations.

Adverse market or economic conditions or trends have caused, and in the future may cause, a significant decline in our net revenues and profitability.”

The closing of naked shorts this year would send affected securities soaring as buying momentum compounds.

Credit Suisse recently postponed publication of its annual report after a last-minute call from the United States Securities and Exchange Commission (SEC), which raised questions about its earlier financial statements.

The unusual intervention by the U.S regulator is the latest blow to Credit Suisse as it attempts to rebuild investor confidence after a series of scandals and setbacks that have sent its shares plunging and led clients to withdraw billions, per Reuters.

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Market News Daily: Credit Suisse Bank News Today.
Market News Daily: Credit Suisse Bank News Today.

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Phase 6 Margin Call Requirements on The Way

Phase 6 Margin Call Requirements
Market News: Phase 6 Margin Call Requirements on the way | ISDA

Market News: Phase 6 margin call requirements are on the way.

Institutions under UMR who had not previously been affected by these specific margin requirements will be as of September 1st, 2022.

Uncleared Margin Rules (or UMR) were created to address the OTC derivatives market–and its participants– in the wake of the global financial crisis (GFC) of 2008-2009.

It implemented new margin requirements for non-centrally cleared derivatives to avoid further systemic risk.

For this reason, they were ‘phased in’, or broken down by phases.

Institutions affected by phase 6 margin call requirements could find themselves in a sticky situation and I’m going to discuss why down below.

Let’s get started!

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Preparing for margin calls

The requirement to exchange initial margin for over-the-counter (OTC) derivatives is one of the last remaining pillars of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) that remains to be fully implemented.

The five-year implementation period began in 2016.

UMR Phases - Phase 6 Margin Requirements
UMR Phases – Phase 6 margin requirements

The chart above depicts the number of counterparties affected throughout each phase.

Phase 5 occurred in September of 2021 where 319 counterparties were affected.

We will be entering Phase 6 in September of 2022, where 775/990 counterparties with more than the $8 billion scope detailed on the graph, or gross amount across all uncleared OTC trades, will be affected.

Phase 5 of UMR touched a mix of sellside and buyside firms, especially medium-sized banks and larger buyside firms.

However, Phase 6 is almost exclusively buyside-focused meaning we could potentially see a massive market rebound, per Bloomberg.

Institutions affected by Phase 6 margin call requirements may include asset managers, banks, hedge funds, and private family offices.

The entire process is extremely challenging according to Bloomberg.

But while it may seem complex in nature, it’s the results that truly matter.

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How long will it take for margin calls to happen?

Although Phase 6 margin call requirements are going into effect on September 1st, 2022, it’s important to note that this is going to take some time.

The derivatives market is massive, now boasting approximately 1 quadrillion derivatives as of May 2022, per Investopedia.

The Senior Principal at BNY Mellon has said in the past that even after Phase 6 there will be margin calls that will still have to be processed.

That’s how massive this event will be.

Phase 6 margin call requirements will begin to margin a variety of sized banks, hedge funds, market makers, and family offices.

The bottom line, the markets need this reset, and its coming.

For a much greater and in-depth walkthrough of what this event means, check out AMCBIGGUM’s video below.

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Phase 6 Margin Call Requirements meaning

Former Citi Executives Have Now Formed a Crypto Hedge Fund

Citi executives crypto hedge fund
Former Citibank executives form crypto hedge fund, Motus Capital Management

A trio of former Citigroup executives who left the bank in March have formed Motus Capital Management, a crypto hedge fund.

The firm says it wants to make it easier for high-net worth individuals to bet on cryptocurrencies.

Alex Kriete, Greg Girasole and Frank Cavallo are seeking to raise $100 million for a pair of actively managed hedge funds that will focus on digital assets, the three said via Bloomberg.

Kriete says clients are having difficulty identifying what’s “scammy” vs “real investment opportunities.”

I know retail investors are going to have a lot of opinions on this.

Let’s break it down some more.

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Who are the crypto hedge fund trio?

Citi executives start crypto hedge fund
Former Citi executives start crypto hedge fund

Kriete and Girasole left Citigroup less than a year after being picked to oversee a new digital-assets group inside the Wall Street giant’s wealth-management division.

Before that, Kriete managed $3 billion and Girasole $5 billion for Citigroup private-bank clients.

Cavallo was most recently an investment counselor at Citigroup, where he oversaw $8 billion of assets and held roles inside the firm’s cross-asset sales and trading division according to Bloomberg.

All three are investing their wealth in Motus Capital Management.

This is one of the first crypto hedge funds to emerge in the crypto space.

And where there’s a hedge fund, we already know there are bets towards the downside.

Motus Capital Management to offer growth and income funds

Motus Capital Management
Motus Capital Management

The crypto hedge fund says it plans to offer clients growth and income funds.

The growth fund will focus on investing in tokens with smaller market capitalizations that larger funds find it harder to invest in, Cavallo said. 

“We think we hit the sweet spot,” he said. “With assets like Bitcoin and ETH, clients can do that on their own. They don’t need to pay someone to buy Bitcoin.”

Crypto hedge funds are relatively new and only have about $3.8 billion in assets under management globally according to a report by PwC.

Less than half of all crypto hedge funds have assets under management of more than $20 million, PwC found.

I expect this side of the industry to exponentially grow this decade.

Citadel’s Ken Griffin said he would provide crypto opportunities to his clients if the asset class became strictly regulated.

Crypto is taking over the new world as businesses such as AMC Entertainment and Tesla transition towards accepting cryptocurrency as a form of payment.

Do you think hedge funds should enter the crypto space?

Former Citi executives start crypto hedge fund

Who’s to say the SEC won’t begin to establish regulations to attribute to hedge funds over retail investors?

Similar to the stock market.

Investors are going to want to keep a close eye on the development of such regulations and ensure the crypto market’s integrity doesn’t get broken.

The crypto market, though a highly speculative market, has been accurately based on supply and demand unlike the stock market where many institutions have blatant power over retail investors.

Let me know in the comment section below if you’d like me to cover topics regarding crypto regulation.

And if you do, also be sure to join the newsletter to get email notifications and updates on new articles.

Read: How to invest in cryptocurrency for beginners

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