The U.K. High Court today threw a wrench in the government's hope for a "hard Brexit," ruling Parliament must approve the invocation of Article 50. In addition, fears of earnings-crushing negative rates are brushed aside as the Bank of England shifts its focus from growth worry to the risk of too-high inflation.
The advance for the banks today is especially notable given the 0.5% decline in the FTSE 100.
Royal Bank of Scotland (RBS +6.5%), Barclays (BCS +4.1%), HSBC (HSBC +0.6%), Lloyds (LYG +3.8%), Standard Chartered (OTCPK:SCBFF +1.1%)
Singapore's central bank has vowed to take action against four institutions for failures in anti-money laundering controls, saying it seized $177M in assets linked to alleged fraud at Malaysian state fund 1MDB.
Preliminary findings uncovered "instances of control failings” at UBS, Standard Chartered (OTCPK:SCBFF) and DBS Group (OTCPK:DBSDY), as well as "substantial breaches" of anti-money laundering regulations at Falcon Private Bank.
At the meeting - chaired by a senior central bank official and including an appearance by Governor Mark Carney - the bankers were given a supportive message about the amount of liquidity in the system, and "encouraged" to keep the lending spigots open (as opposed to the credit crunch that followed Lehman Brothers).
In what could only be described as certain to happen once the Panama Papers leak hit, the New York Department of Financial Services has asked Goldman Sachs (NYSE:GS), along with BNP Paribas (OTCQX:BNPQY), CIBC (NYSE:CM), and Standard Chartered (OTCPK:SCBFF) about their possible involvement with shell companies, according to CNBC.
The NYDFS also requested information from 13 other lenders over the matter last month.
Looking to pare its balance sheet after booking record impairments, Standard Chartered (OTCPK:SCBFF) is seeking to sell major assets in Asia, Bloomberg reports.
The London-based bank is speaking with potential buyers for about $1.4B of stressed loans made to Indian firms including GMR Infrastructure (OTC:GMQRY), and has started a sale of around $3B of assets across the rest of the region.
Those assets include loans as well as proprietary bond and equity investments in China, Indonesia and Malaysia.
European bank investors haven't reacted kindly to a string of dividend cuts from the likes of Santander (NYSE:SAN), Deutsche Bank (NYSE:DB), Barclays (NYSE:BCS)and Standard Chartered (OTCPK:SCBFF), but BIS Chief Economist Hyun Song Shin believes payouts have been too high since the financial crisis.
Returning too much capital, he says, is stifling lenders' ability to lend and thus crimping future profits, he argues. Even more absurd, a number of banks are raising capital while at the same time promising to maintain payouts - in other words, asking investors for money so they can give some of it right back (minus the underwriter's fee, of course). Credit Suisse (NYSE:CS) was the latest to do so last October.
The most curious part of investor demands for dividends is that when banks retain profits, it's still shareholder money as long as said funds are spent on silly acquisitions (or bonuses).