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Profits for the US banking industry increased by 79.5 per cent to $64.2bn in the first quarter of 2024. This was mainly due to large banks no longer paying billions in Federal Deposit Insurance Corporation special assessment fees that they were previously required to pay to cover costs from bank failures last year, according to the FDIC.
The FDIC reported in its latest quarterly banking profile that much of the profit increase was attributed to banks not facing this assessment, which had significantly reduced profits at the end of 2023. Additional factors contributing to the increase in profits included boosts in non-interest income and reduced provision expenses.
Bank deposits increased for the second consecutive quarter, rising by 1.1 per cent or $190.7bn, while estimated uninsured deposits grew by 0.9 per cent, representing the first increase since the end of 2021.
While asset quality metrics remained generally favourable, the FDIC noted deterioration in credit card and commercial real estate portfolios. Notably, the noncurrent rate for non-owner occupied CRE loans rose to 1.59 per cent, the highest since Q4 2013, mainly driven by office portfolios at large banks.
The FDIC also noted an increase in its "problem bank list," which grew from 52 to 63 banks in the first quarter, with total assets at these banks rising to $82.1bn.
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UBS has restructured its executive board, appointing two potential successors to CEO Sergio Ermotti to co-lead its wealth management division. Iqbal Khan, previously the head of wealth management, will now head the Asia-Pacific region, while Rob Karofsky, former investment bank head, will lead the Americas. Both will share responsibilities as co-presidents of wealth management.
According to press reports, the restructuring aims to broaden the experience of executives considered likely to succeed Ermotti, who is expected to retire by 2027. The Financial Times reported earlier this week that UBS’s board plans to identify three internal candidates by next year.
In a memo to staff, Ermotti stated that these appointments would help UBS progress on its integration journey, enhance synergies and focus on growth in the Americas and Asia-Pacific.
The reshuffle also includes the retirement of Credit Suisse CEO Ulrich Körner and UBS Americas head Naureen Hassan. Körner, the last CEO of Credit Suisse, will depart following the completion of the merger of the two banks this week.
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Visa and Mastercard have agreed to pay $197mn to settle a US class action lawsuit accusing them of conspiring to keep ATM fees artificially high.
The proposed settlement, revealed in a US federal court filing on Wednesday, involves a group of at least 175mn consumers who withdrew cash from bank-operated ATMs since 2007. Collectively, they were seeking damages of more than $9bn.
The proposed settlement, which is subject to court approval, includes $104.6mn from Visa and $92.8mn from Mastercard, with earlier settlements from bank defendants Bank of America, Wells Fargo and JPMorgan, part of the same lawsuit, totalling $66mn.
Consumers will be given an opportunity to raise objections to the settlement terms, including the fund amount and any awarded legal fees. Both Visa and Mastercard deny any wrongdoing.
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Goldman Sachs Asset Management’s alternative investments platform announced on Wednesday that its latest fund, West Street Loan Partners V, has raised over $20bn for senior direct lending.
The fund aims to support private equity-backed global businesses and has already committed $4bn to 37 portfolio companies.
Direct lending, a segment of private credit, has seen substantial growth as non-bank entities encounter fewer regulatory barriers than traditional lenders. Goldman has previously stated its plans to expand its private credit portfolio from $130bn to $300bn within five years.
