A massive US bank now plans to open 165 branches within the next two years after closing several locations in the past year.
Bank of America has announced an ambitious plan to open more than 165 new bank branches across 63 markets by the end of 2026, including 40 locations set to open this year.
The announcement was made on Monday, coinciding with the opening of the bank’s first financial center in Louisville, Kentucky, where it plans to establish five branches by the end of 2025.
This expansion is part of the bank’s ongoing strategy to consolidate its operations, as it aims to close two branches for every new one opened.
The Louisville branch marks a significant step in the expansion plans first revealed in June 2023, which include entering nine new markets and four additional states by 2026.
Aron Levine, president of preferred banking at Bank of America, stated, “We are reaching more clients through the expansion and modernization of our financial centers.”
He emphasized that while many customers utilize digital banking for routine transactions, they seek in-person support for more complex financial matters.
With the opening of its first branch in Lexington, Kentucky, in 2021, the bank’s focus on Louisville will bring its total branches in the state to ten by 2027, serving approximately 95,000 consumers and small-business owners.
Felicia Lewis, Bank of America’s southeast division executive, commented, “By expanding our capabilities in this market, we are able to better serve clients, and further drive local community growth and development.”
In addition to Louisville, Bank of America plans to open its first financial centers in Boise, Idaho, early next year.
The bank’s expansion efforts will also target other markets, including Omaha, Nebraska; Milwaukee and Madison, Wisconsin; New Orleans; Dayton, Ohio; and Birmingham and Huntsville, Alabama.
By the completion of its expansion plans, Bank of America will operate in over 200 markets across 39 states.
Since launching its current expansion project in 2014, the bank has invested more than $5 billion in its financial centers.
CEO Brian Moynihan highlighted the importance of these branch investments for enhancing customer relationships.
As of March, Bank of America ranks third among U.S. banks in terms of brick-and-mortar locations, with 3,975 branches.
Earlier this year, JPMorgan Chase announced plans to add over 500 branches by 2027, focusing on underserved areas while also renovating existing locations and expanding its workforce.
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BofA now predicts a fed rate cut of 125 BPS for 2025 and another 75 BPS during the fourth quarter of this year.
In a recent analysis, Bank of America (BofA) examined the Federal Reserve’s 50 basis points (bps) rate cut, characterizing it as a “recalibration” of monetary policy rather than the beginning of a more aggressive rate-cutting cycle.
Despite the Fed’s optimistic outlook, BofA expressed doubts about the effectiveness of these measures, predicting deeper cuts ahead.
The bank forecasts an additional 75 bps reduction in the fourth quarter of this year and 125 bps in 2025.
BofA noted that the Fed’s messaging, particularly in Chair Jerome Powell’s comments and the dot plot, was unexpectedly hawkish despite the recent rate cut.
Powell clarified that the cut was not prompted by labor market concerns but was intended to adjust rates closer to neutral.
The Fed’s Summary of Economic Projections (SEP) maintained a positive outlook, projecting stable growth and a quicker decline in inflation.
The Federal Open Market Committee (FOMC) statement contained significant updates, but they did not align with a dovish interpretation of the rate cut.
BofA highlighted the Fed’s confidence in meeting its inflation targets and remarked that the risks related to inflation and employment were deemed “roughly in balance.”
Notably, the statement included a commitment to “maximum employment,” marking a shift in communication.
Governor Michelle Bowman dissented from the decision, the first such dissent since 2005, indicating some internal disagreement within the Fed.
The SEP released alongside the rate decision was notably optimistic, predicting above-trend growth and a faster path to lower inflation.
While the Fed raised its unemployment forecast to 4.4%, this was viewed as a reflection of current conditions rather than a significant change in outlook.
However, the Fed’s dot plot raised concerns, showing a median forecast of just 100 bps of cuts in 2024, with nearly half the committee anticipating only a 25 bps cut later this year.
BofA suggested this hawkish view could undermine the Fed’s credibility, especially since pre-meeting communications had hinted at a smaller cut.
This divergence may leave the Fed susceptible to market pressures for further reductions.
BofA believes the labor market is likely to remain weak, compelling the Fed to implement a substantial cut in the fourth quarter.
The bank predicts an additional 75 bps cut in 2024 and 125 bps in 2025, leading to a terminal rate of 2.75-3%.
Following the Fed meeting, long-term yields rose slightly, indicating that the central bank’s “recalibration” may not have achieved its intended impact.
BofA concluded that unless economic data consistently shows strength, the Fed may need to abandon its hawkish stance and consider further cuts.
Market News Today – BofA Now Predicts A Fed Rate Cut of 125 BPS For 2025.
A massive US bank now gets hit with an AML investigation over flaws related to its internal controls and crimes risk management.
The Office of the Comptroller of the Currency (OCC) has taken enforcement action against Wells Fargo, raising concerns about the bank’s anti-money laundering (AML) controls and financial crimes risk management.
This development could impact the potential lifting of Wells Fargo’s asset cap and might signal increased scrutiny for other major banks.
On Thursday, the OCC announced it found several deficiencies in Wells Fargo’s AML practices, including issues with suspicious activity reporting, customer due diligence, and customer identification protocols.
The regulatory agreement mandates that Wells enhance its AML and sanctions risk management, secure OCC approval for new offerings, and notify the agency before expanding certain services.
Wells Fargo stated it is already addressing many of the requirements outlined in the agreement and is committed to resolving them with urgency.
Analyst Scott Siefers from Piper Sandler noted that while the formal action was anticipated, it still represents a setback in the bank’s progress to resolve regulatory issues.
Wells Fargo has been under the regulatory microscope since the fallout from its 2016 fake accounts scandal.
Currently, the bank operates under a $1.95 trillion asset cap imposed by the Federal Reserve, one of nine consent orders against it, though six have been lifted since Charlie Scharf became CEO.
The OCC’s 26-page agreement, which did not impose any fines, requires Wells to improve its internal controls and reporting mechanisms related to AML and sanctions practices.
The bank must also enhance its audit program and ensure data integrity for compliance systems.
Jefferies analyst Ken Usdin noted that the broad requirements could impact Wells Fargo’s future growth strategy, but the practical implications remain unclear.
Despite the seriousness of AML issues, Royal Bank of Canada analyst Gerard Cassidy believes this enforcement action will not hinder efforts to lift the asset cap, as it primarily addresses past consumer banking problems.
Wells Fargo has invested significantly in its risk and control operations, hiring around 10,000 employees and increasing spending by $2.5 billion annually since 2018.
This suggests the new regulatory action may not drastically alter overall costs.
Other major banks have also faced scrutiny regarding their AML and sanctions programs.
Bank of America and Citi have highlighted related risks in their recent filings, while JPMorgan Chase continues to disclose ongoing investigations from a 2019 money-laundering incident in India.
Additionally, Canadian lender TD is under investigation for its U.S. AML program related to drug trafficking allegations.
As the financial landscape evolves, the potential for similar enforcement actions against other banks remains uncertain, leaving the industry on alert.
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Market News Today – BofA Now Predicts A Fed Rate Cut of 125 BPS For 2025.
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A massive US bank now gets hit with an AML investigation over flaws related to its internal controls and crimes risk management.
The Office of the Comptroller of the Currency (OCC) has taken enforcement action against Wells Fargo, raising concerns about the bank’s anti-money laundering (AML) controls and financial crimes risk management.
This development could impact the potential lifting of Wells Fargo’s asset cap and might signal increased scrutiny for other major banks.
On Thursday, the OCC announced it found several deficiencies in Wells Fargo’s AML practices, including issues with suspicious activity reporting, customer due diligence, and customer identification protocols.
The regulatory agreement mandates that Wells enhance its AML and sanctions risk management, secure OCC approval for new offerings, and notify the agency before expanding certain services.
Wells Fargo stated it is already addressing many of the requirements outlined in the agreement and is committed to resolving them with urgency.
Analyst Scott Siefers from Piper Sandler noted that while the formal action was anticipated, it still represents a setback in the bank’s progress to resolve regulatory issues.
Wells Fargo has been under the regulatory microscope since the fallout from its 2016 fake accounts scandal.
Currently, the bank operates under a $1.95 trillion asset cap imposed by the Federal Reserve, one of nine consent orders against it, though six have been lifted since Charlie Scharf became CEO.
The OCC’s 26-page agreement, which did not impose any fines, requires Wells to improve its internal controls and reporting mechanisms related to AML and sanctions practices.
The bank must also enhance its audit program and ensure data integrity for compliance systems.
Jefferies analyst Ken Usdin noted that the broad requirements could impact Wells Fargo’s future growth strategy, but the practical implications remain unclear.
Despite the seriousness of AML issues, Royal Bank of Canada analyst Gerard Cassidy believes this enforcement action will not hinder efforts to lift the asset cap, as it primarily addresses past consumer banking problems.
Wells Fargo has invested significantly in its risk and control operations, hiring around 10,000 employees and increasing spending by $2.5 billion annually since 2018.
This suggests the new regulatory action may not drastically alter overall costs.
Other major banks have also faced scrutiny regarding their AML and sanctions programs.
Bank of America and Citi have highlighted related risks in their recent filings, while JPMorgan Chase continues to disclose ongoing investigations from a 2019 money-laundering incident in India.
Additionally, Canadian lender TD is under investigation for its U.S. AML program related to drug trafficking allegations.
As the financial landscape evolves, the potential for similar enforcement actions against other banks remains uncertain, leaving the industry on alert.
For more US Bank News like this, join the newsletter or opt-in for push notifications.
Market News Today – A Massive US Bank Now Gets Hit With AML Investigation.
Citibank now fires a whistleblower for ‘underperformance’, after the former employee provided records requested by the OCC.
Citi has filed a countersuit against its former employee, Kathleen Martin, alleging that she was terminated not for refusing to falsify records for the Office of the Comptroller of the Currency (OCC), as she claimed in her lawsuit from May, but rather for being unable to properly fulfill the duties of her role.
Martin, who was let go from her position as Citi’s interim data transformation chair in September 2023 after nearly two years with the bank, had alleged in her lawsuit that she was fired for not agreeing to Chief Operating Officer Anand Selva’s request to conceal information from the OCC that would make the lender “look bad.”
In a revised lawsuit, Kathleen Martin has accused Citi’s Chief Operating Officer Anand Selva of intentionally deceiving the bank by wanting to misrepresent Citi’s compliance metrics to the Office of the Comptroller of the Currency (OCC).
Martin claims Selva sought to conceal information from the OCC that would have made the bank “look bad.”
However, Citi maintains that Martin’s termination in September 2023 was not due to her refusal to falsify records, but rather because she lacked the necessary “leadership and engagement skills” to effectively execute the role of interim Data Transformation Chair, which she had been appointed to after the previous chair, Rob Casper, departed the company.
Citi asserts that during Martin’s interviews and assessment for the interim role, it was identified that she needed to improve in areas like her “dogmatic nature, lack of innovation and lack of experience driving the execution of complex change across Citi.”
Once Casper left, Citi’s senior leadership, including COO Selva, determined that Martin could not successfully fulfill the demands of the interim chair position.
According to Citi, COO Anand Selva tried to help the plaintiff, Kathleen Martin, improve her performance in the interim Data Transformation Chair role.
Selva allegedly set up one-on-one meetings and working groups to facilitate better collaboration and working relationships with stakeholders.
Selva’s HR team also provided Martin with a senior mentor to support her development.
In May 2023, Citi leadership discussed a plan to improve Martin’s performance.
In July, Selva conveyed Martin’s mid-year review before she raised any concerns about his behavior.
Soon after, Martin contacted HR and expressed fears about her job security.
Citi claims that Martin “felt her position was at risk,” but the bank asserts that internal documents showed she “exceeded expectations” and that CEO Jane Fraser had commended her for her “gravitas” and ability to build “strong relationships” at the bank.
However, Citi says Martin failed to heed the feedback provided, and she was ultimately removed from the Data Transformation Chair role because she lacked the “executive level relationships” and leadership needed to successfully execute the data transformation efforts.
Citi says the data transformation work was too critical for the bank to tolerate Martin’s underperformance.
Citi denies Martin’s claims that she protested the reporting of a key metric accurately or that Selva objected to it.
The bank says Selva and Martin met in September 2023 to discuss reporting certain metrics using red, amber, and green scales.
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BMO is now exonerated in Tom Petters Ponzi scheme case by a U.S. appeals court, dismissing a $564 million jury verdict against the bank.
A panel of judges from the 8th U.S. Circuit Court of Appeals has overturned a significant bankruptcy court ruling that found BMO Harris Bank liable for aiding and abetting a $3.7 billion Ponzi scheme orchestrated by former businessman Tom Petters.
The federal appeals court dismissed a $564 million jury verdict against BMO, which had been held accountable for its alleged involvement in the fraudulent activities.
Tom Petters was convicted in 2009 and sentenced to 50 years in prison for conspiracy, wire fraud, and mail fraud after defrauding investors and laundering money through accounts at Marshall & Ilsley Bank.
BMO acquired Marshall & Ilsley Bank in 2011 for $4.1 billion.
The three-judge panel ruled that Douglas Kelley, the court-appointed trustee for Petters Company, Inc., could not recover funds for creditors because the company itself had participated in the execution of the Ponzi scheme.
The court referenced a similar ruling in a case involving Bernie Madoff, noting that a debtor’s misconduct is attributed to the trustee because they represent the debtor.
The judges stated, “Even assuming that the bank aided the scheme to the degree that Kelley alleges, BMO cannot be more culpable than the entity that orchestrated the scheme.”
They emphasized that Petters Company, Inc. was established solely to facilitate the fraudulent operations.
In light of this ruling, BMO plans to reverse a C$1.19 billion ($875.5 million) provision related to the case, resulting in an anticipated after-tax recovery of C$875 million ($643.7 million) to be recorded in the fourth quarter as an adjusting item.
BMO expressed satisfaction with the court’s decision, stating it was “very pleased” with the outcome.
The bankruptcy trustee did not respond to requests for comment from Crain’s or Reuters.
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Market News Today – BMO Is Now Exonerated in Tom Petters Ponzi Scheme Case.
Citibank now fires a whistleblower for ‘underperformance’, after the former employee provided records requested by the OCC.
Citi has filed a countersuit against its former employee, Kathleen Martin, alleging that she was terminated not for refusing to falsify records for the Office of the Comptroller of the Currency (OCC), as she claimed in her lawsuit from May, but rather for being unable to properly fulfill the duties of her role.
Martin, who was let go from her position as Citi’s interim data transformation chair in September 2023 after nearly two years with the bank, had alleged in her lawsuit that she was fired for not agreeing to Chief Operating Officer Anand Selva’s request to conceal information from the OCC that would make the lender “look bad.”
In a revised lawsuit, Kathleen Martin has accused Citi’s Chief Operating Officer Anand Selva of intentionally deceiving the bank by wanting to misrepresent Citi’s compliance metrics to the Office of the Comptroller of the Currency (OCC).
Martin claims Selva sought to conceal information from the OCC that would have made the bank “look bad.”
However, Citi maintains that Martin’s termination in September 2023 was not due to her refusal to falsify records, but rather because she lacked the necessary “leadership and engagement skills” to effectively execute the role of interim Data Transformation Chair, which she had been appointed to after the previous chair, Rob Casper, departed the company.
Citi asserts that during Martin’s interviews and assessment for the interim role, it was identified that she needed to improve in areas like her “dogmatic nature, lack of innovation and lack of experience driving the execution of complex change across Citi.”
Once Casper left, Citi’s senior leadership, including COO Selva, determined that Martin could not successfully fulfill the demands of the interim chair position.
According to Citi, COO Anand Selva tried to help the plaintiff, Kathleen Martin, improve her performance in the interim Data Transformation Chair role.
Selva allegedly set up one-on-one meetings and working groups to facilitate better collaboration and working relationships with stakeholders.
Selva’s HR team also provided Martin with a senior mentor to support her development.
In May 2023, Citi leadership discussed a plan to improve Martin’s performance.
In July, Selva conveyed Martin’s mid-year review before she raised any concerns about his behavior.
Soon after, Martin contacted HR and expressed fears about her job security.
Citi claims that Martin “felt her position was at risk,” but the bank asserts that internal documents showed she “exceeded expectations” and that CEO Jane Fraser had commended her for her “gravitas” and ability to build “strong relationships” at the bank.
However, Citi says Martin failed to heed the feedback provided, and she was ultimately removed from the Data Transformation Chair role because she lacked the “executive level relationships” and leadership needed to successfully execute the data transformation efforts.
Citi says the data transformation work was too critical for the bank to tolerate Martin’s underperformance.
Citi denies Martin’s claims that she protested the reporting of a key metric accurately or that Selva objected to it.
The bank says Selva and Martin met in September 2023 to discuss reporting certain metrics using red, amber, and green scales.
This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.
US Bank is at a critical juncture following recent acquisitions and technological updates, according to CEO Andy Cecere during the bank’s investor day.
However, Wells Fargo analyst Mike Mayo expressed skepticism, suggesting that the bank might benefit from new leadership.
“Andy, I love you, but I don’t love the results,” Mayo remarked, highlighting that while the bank presented a coherent strategy, it had previously failed to meet its targets.
Mayo questioned Cecere, a veteran of U.S. Bank for 39 years, about potential succession plans and whether the bank is considering external candidates for the CEO role. Gunjan Kedia, previously the vice chair of wealth and corporate banking, was promoted to president in May, positioning her as a likely successor.
In response to Mayo’s concerns, Cecere defended the bank’s investments in acquisitions and technology, asserting that these were essential to maintain competitiveness, even as profitability has lagged behind peers.
“It was a short-term bump, for sure,” he acknowledged, but expressed confidence in the bank’s improved positioning.
U.S. Bank, which acquired MUFG Union Bank in 2022, is committed to achieving its revenue and expense targets, with executives optimistic about positive operating leverage in the latter half of the year.
Mayo reiterated the need for fresh leadership, stating that U.S. Bank has the potential for better returns.
Kedia’s presence at the event reinforced her status as a potential successor, with Cecere noting her leadership in integrating acquisitions.
He acknowledged that while the technical aspects of integration have been strong, the go-to-market strategy needs improvement, an area where Kedia is now taking charge.
The bank highlighted the interconnectedness of its various business units, emphasizing its ability to bundle services effectively.
However, UBS analyst Erika Najarian cautioned that this remains a “show me” story, as investors await tangible results.
With approximately $665 billion in assets as of June 30, U.S. Bank aims to become a Category II financial institution by 2027.
The bank is focusing on expanding its branch network in high-growth areas and enhancing its digital capabilities through partnerships with Edward Jones and State Farm, particularly in regions where it currently lacks a presence.
Kedia mentioned a desire to acquire a southeastern lender but acknowledged the uncertainty of the regulatory environment, leading the bank to prioritize organic growth instead.
She described the strategy as disciplined and measured, aiming for a broader reach without relying on large acquisitions.
Cecere confirmed that while the bank might consider smaller acquisitions, its strategy will not hinge on significant deals at this time.
In the payments sector, vice chair Shailesh Kotwal emphasized the bank’s comfort with its current offerings, though he noted the fast-paced evolution of technology could necessitate future reevaluations.
Analysts expressed mixed feelings about the bank’s narrative.
Oppenheimer’s Chris Kotowski found the story compelling but questioned whether it was convincing enough, while others echoed the sentiment that U.S. Bank’s strong core business might not easily penetrate new markets.
As U.S. Bank navigates these challenges, the focus will remain on delivering results and responding to the evolving landscape of the banking industry.
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Market News Today – US Bank Now Faces Turning Point Amid Massive Criticism.
Citibank now fires a whistleblower for ‘underperformance’, after the former employee provided records requested by the OCC.
Citi has filed a countersuit against its former employee, Kathleen Martin, alleging that she was terminated not for refusing to falsify records for the Office of the Comptroller of the Currency (OCC), as she claimed in her lawsuit from May, but rather for being unable to properly fulfill the duties of her role.
Martin, who was let go from her position as Citi’s interim data transformation chair in September 2023 after nearly two years with the bank, had alleged in her lawsuit that she was fired for not agreeing to Chief Operating Officer Anand Selva’s request to conceal information from the OCC that would make the lender “look bad.”
In a revised lawsuit, Kathleen Martin has accused Citi’s Chief Operating Officer Anand Selva of intentionally deceiving the bank by wanting to misrepresent Citi’s compliance metrics to the Office of the Comptroller of the Currency (OCC).
Martin claims Selva sought to conceal information from the OCC that would have made the bank “look bad.”
However, Citi maintains that Martin’s termination in September 2023 was not due to her refusal to falsify records, but rather because she lacked the necessary “leadership and engagement skills” to effectively execute the role of interim Data Transformation Chair, which she had been appointed to after the previous chair, Rob Casper, departed the company.
Citi asserts that during Martin’s interviews and assessment for the interim role, it was identified that she needed to improve in areas like her “dogmatic nature, lack of innovation and lack of experience driving the execution of complex change across Citi.”
Once Casper left, Citi’s senior leadership, including COO Selva, determined that Martin could not successfully fulfill the demands of the interim chair position.
According to Citi, COO Anand Selva tried to help the plaintiff, Kathleen Martin, improve her performance in the interim Data Transformation Chair role.
Selva allegedly set up one-on-one meetings and working groups to facilitate better collaboration and working relationships with stakeholders.
Selva’s HR team also provided Martin with a senior mentor to support her development.
In May 2023, Citi leadership discussed a plan to improve Martin’s performance.
In July, Selva conveyed Martin’s mid-year review before she raised any concerns about his behavior.
Soon after, Martin contacted HR and expressed fears about her job security.
Citi claims that Martin “felt her position was at risk,” but the bank asserts that internal documents showed she “exceeded expectations” and that CEO Jane Fraser had commended her for her “gravitas” and ability to build “strong relationships” at the bank.
However, Citi says Martin failed to heed the feedback provided, and she was ultimately removed from the Data Transformation Chair role because she lacked the “executive level relationships” and leadership needed to successfully execute the data transformation efforts.
Citi says the data transformation work was too critical for the bank to tolerate Martin’s underperformance.
Citi denies Martin’s claims that she protested the reporting of a key metric accurately or that Selva objected to it.
The bank says Selva and Martin met in September 2023 to discuss reporting certain metrics using red, amber, and green scales.
This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.
