Friday March 19, 2021 –
Here are the new and noteworthy stories we have been following this week.
Chime prepares stock market listing as online banking grows
According to various sources, Chime has held preliminary talks with investment banks about going public possibly at the end of 2021; Chime was valued at $14.5 billion in a private fundraising round last September, but is expected to be valued at more than $30 billion in the public markets.
https://www.reuters.com/article/us-chime-ipo-exclusive-idUSKBN2B82TG
Visa, Mastercard Delay Credit-Card Swipe Fee Increases
Visa and Mastercard have decided to postpone the credit card interchange adjustments there were scheduled for later this year; citing the continuing effects of the coronavirus pandemic on businesses, Visa and Mastercard said they will postpone the interchange adjustments to April next year.
https://www.wsj.com/articles/visa-mastercard-delay-credit-card-swipe-fee-increases-11615904774
Global investors value China’s Ant Group at over $200 billion
Given the postponement of Ant’s IPO and forced restructuring by the Chinese government, global investors have scaled back the valuation of Ant to over $200 billion down from the $315 billion expected IPO valuation; there is broad investor uncertainty about potential returns due to the lowered valuation and the practical impact of the restructuring.
HSBC in Talks to Sell French Retail Bank to Cerberus
HSBC is in exclusive talks to sell its French retail bank to Cerberus Capital Management LP as part of a global reorganization of its operations that will see the bank largely exit North America and Europe as it invests in Asia; Cerberus plans to combine HSBC France with My Money Group, a French lender it acquired in 2017 from GE.
https://www.wsj.com/articles/hsbc-in-talks-to-sell-french-retail-bank-to-cerberus-11615999984
Revolut leaves Canada
Revolut is exiting Canada after it failed to get any serious traction; Revolut came to Canada about eighteen months ago as part of a global expansion initiative and commenced a beta with a limited set of products and services.
https://www.finextra.com/newsarticle/37688/revolut-leaves-canada
Morgan Stanley becomes the first big U.S. bank to offer its wealthy clients access to bitcoin funds
Morgan Stanley has become the first big US bank to offer its wealth management clients access to bitcoin funds – two of the funds are from Galaxy Digital, while the third is a joint effort from FS Investments and NYDIG; for now Morgan Stanley is only allowing clients that have at least $2 million in assets held by the firm access to the bitcoin funds.
Powell Says Central Bank Digital Currency Must Coexist With Cash
Speaking at a conference hosted by the Committee on Payments and Market Infrastructures (BIS), Fed Chair Jerome Powell said, that potential central bank digital currencies would need to be integrated into existing payment systems along with cash and other forms of money; Powell specifically called out the current limitations of cross-border payments and the need for greater cooperation and collaboration between various international forums.
Australia to impose tighter restrictions on new challenger banks
The Australian Prudential Regulatory Authority is planning to impose stricter conditions on applicants for deposit-taking licenses in the wake of problems faced by new digital banks (Xinja, 86 4000); under proposed new guidelines, restricted Authorized Deposit Taking institutions (ADIs) must achieve a limited launch of both an income-generating asset product and a deposit product before being granted a full license.
Visa says the DOJ plans to probe its debit card practices, shares fall 6%
Visa has reported that the DOJ is opening an investigation into its debit card business and possible anticompetitive practices; it is believed that the DOJ is seeking to determine whether Visa in the US has inhibited merchants’ capacity to route debit-card transactions over less-expensive networks – this includes both online and in-store debit card transactions.
https://www.cnbc.com/2021/03/19/visa-doj-probes-possible-anticompetitive-debit-card-business.html
Federal Reserve calls time on looser capital requirements for US banks
The Fed has announced that it will let looser capital rules for banks introduced at the start of the pandemic expire at the end of March; capital rules were eased last year in a temporary change to the supplementary leverage ratio (SLR) whereby banks were allowed to temporarily exclude holdings of US Treasuries and cash kept in reserve at the central bank from their assets when calculating the ratio.
https://www.ft.com/content/279c2755-acab-4d9a-9092-d55fe5f518fa
