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FILE PHOTO: The corporate logo of financial firm Morgan Stanley is pictured on the company’s world headquarters in the Manhattan borough of New York City, January 20, 2015. REUTERS/Mike Segar
April 23, 2019
NEW YORK (Reuters) – Morgan Stanley’s Shelley O’Connor, one of two co-heads of the wealth management business, was named on Tuesday to lead two of the bank’s regulated entities, according to an internal memo seen by Reuters.
O’Connor will become chief executive and chairman of both Morgan Stanley Bank NA and Morgan Stanley Private Bank NA, the banks through which the firm sells lending products, and handles deposit accounts and other traditional bank products.
Andy Saperstein, co-head of the wealth management business alongside O’Connor, will become the sole head of that business, according to the memo signed by Chief Executive James Gorman.
The bank also named Rob Rooney as head of technology, operations and firm resiliency, a new role that combines several functions that were previously in separate divisions.
The Wall Street Journal reported the new assignments earlier on Tuesday.
(Reporting by Elizabeth Dilts; Editing by Sonya Hepinstall)
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FILE PHOTO: U.S. Treasury Secretary Steven Mnuchin leaves the G-20 Finance Ministers and Central Bank Governors’ meeting at the IMF and World Bank’s 2019 Annual Spring Meetings, in Washington, April 12, 2019. REUTERS/James Lawler Duggan
April 23, 2019
WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin said on Tuesday he cannot comply with a demand by a House of Representatives committee to turn over President Donald Trump’s tax returns “until it is determined to be consistent with law.”
In a letter to House Ways and Means Committee Chairman Richard Neal, Mnuchin said he expected to have an answer to the committee’s demand by May 6 after consulting with the Justice Department. The committee had set a 5 p.m. EDT (2100 GMT) Tuesday deadline for the Internal Revenue Service to turn over Trump’s returns.
(Reporting by David Morgan; Writing by Eric Beech; Editing by David Alexander)
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FILE PHOTO: Traffic is pictured at twilight along 42nd St. in the Manhattan borough of New York, U.S., March 27, 2019. REUTERS/Carlo Allegri
April 23, 2019
By Richard Leong and Trevor Hunnicutt
(Reuters) – American middle class consumers are enjoying the strongest wage growth in a decade, but higher gasoline prices are eating a good chunk of that increase for many, and it looks like pump prices are headed higher.
Gasoline pump prices have already jumped about 25% this year, the fastest rate in three years. Trump administration sanctions against Iranian crude oil exports had something to do with that, and this week’s move to tighten sanctions could soon send prices even higher.
Crude oil prices hit their highest in about six months on Tuesday.
Some analysts expect the national average pump price, currently near $2.85 a gallon, will climb above $3 a gallon for the first time since 2014. Few goods prices aggravate U.S. consumers as much as high gasoline prices.
“It’s an important part of consumers’ psyche,” Mark Zandi, chief economist at Moody’s Analytics, said of a further rise in energy prices. “They live with it everyday.”
Zandi and other analysts said higher gasoline prices would irritate U.S. motorists heading into the summer driving season, but they do not think a moderate fuel price hike would force people to cut spending in other areas.
For now, consumer spending has remained resilient, with wages growing in a tight job market. Average hourly earnings in the private sector are rising at roughly 3.2% year over year, the strongest in a decade.
Those bigger paychecks helped pay for costlier gasoline after the Organization of the Petroleum Exporting Countries (OPEC) and allied producers including Russia reduced output to prop up prices. Retail prices for regular gasoline have risen around 55 cents a gallon so far this year from $2.30 at end of 2018, according to AAA, an automotive advocacy group.
“So far it hasn’t been a particularly large headwind for U.S. consumers,” said Matt Luzzetti, senior economist at Deutsche Bank AG.
The Trump administration called for buyers of Iranian oil to stop purchases by May 1 or face sanctions, ending six months of waivers that allowed Iran’s eight biggest buyers to keep importing limited volumes.
Analysts noted that U.S. domestic crude production is surging and said higher output from OPEC and Russia could help offset losing about 1 million barrels per day of Iranian oil from world markets. But sources on Tuesday said Gulf OPEC members were ready to raise output only if they saw sufficient demand.
(GRAPHIC: U.S. wages, gasoline link: https://tmsnrt.rs/2IC9wbu)
PINCHED CONSUMERS
Some U.S. consumers are already paying $3 a gallon at the pump, and will feel the squeeze if prices rise further. In February, filling a 25.5 gallon tank of a sports utility vehicle with regular gasoline would have cost around $57 on average. That has risen to nearly $73, based on government data.
For a $15-an-hour employee working 35 hours a week, filling up once a week now costs 14% of gross pay, up from less than 11% just 10 weeks ago.
“I’m hyper-aware of the gas pricing,” said Brittany Trotter, a part-time driver for Lyft Inc based in Washington, D.C. She said rising fuel costs have cut her profits and stretched her budget.
Even before the latest Iran news, drivers expected rising prices at the pump to cut their income. A survey in March showed consumers expected prices to rise 4.7% over the next year, the largest figure in nine months, according to the Federal Reserve Bank of New York. The consumers surveyed expected their wages to rise 2.6% over the year, though earnings growth expectations slipped for people with a high school diploma or less education.
(GRAPHIC: U.S. gasoline demand, prices, GDP link: https://tmsnrt.rs/2Dtnnga).
(GRAPHIC: Iran seaborne crude oil & condensate exports link: https://tmsnrt.rs/2DE8CHt).
(GRAPHIC: Russian, U.S. & Saudi crude oil production link: https://tmsnrt.rs/2EUHeFO).
(Additional reporting by Dan Burns; Graphic by Stephen Culp, Richard Leong; Editing by David Gregorio)
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FILE PHOTO: A general view of banks, hotels, office and residential buildings in the center of Cairo, Egypt, September 13, 2018. REUTERS/Amr Abdallah Dalsh
April 23, 2019
By Patrick Werr
CAIRO (Reuters) – Egypt’s government is drawing up a plan to turn over as many as 150 crumbling historic buildings to the private sector to refurbish and lease out for profit, the Minister of Public Enterprise said on Tuesday.
The plan could potentially save an eclectic mix of neo-classical, beaux arts, art nouveaux, art deco and early modern styles built mostly in the first half of the 20th century then nationalized in the early 1960s.
It could also revitalize important tourism districts in central Cairo, Alexandria and Port Said on the Suez Canal.
The buildings have fallen into various degrees of disrepair for lack of funding and maintenance, with many tenants paying tiny sums for units that have remained rent-controlled for more than half a century.
Public enterprise minister Hesham Tawfik said the government would follow the model of privately owned Al Ismaelia for Real Estate Investment, which has been slowly renovating 23 historic buildings it has bought in downtown Cairo.
“They take the buildings, they settle with individuals or companies who are renting these apartments, they do the necessary renovations, inside and outside, and they simply rent them to the private sector. And they are making some decent return on their investment,” Tawfik said.
“We intend to do this by offering parcels of buildings, and by parcels I mean four to five buildings per transaction, for the private sector to repeat what Ismaelia did, on a revenue-sharing basis,” he said at business conference.
The plan was being studied at the state Insurance Holding Co. which along with the state insurance company owns 350 buildings, 150 of which are classified as historic.
“Probably they will come up with something very soon to offer to private developers, who we will insist be Ismaelia-style, with the right social background to be able to make sure that the development is done at the right level,” Tawfik said.
REPAYING DEBTS
The government was also preparing to sell about 2 million square meters of unused land owned by state holding companies to help pay back more than 38 billion Egyptian pounds ($2.22 billion) in debts owed to other public entities, he said.
These include the National Investment Bank, the Ministry of Petroleum, the Ministry of Electricity, pension funds and the tax authority.
Once paid, any extra proceeds will be used to finance restructuring plans for companies under the ministry, including 21 billion pounds for textile industry and 5 billion pounds for chemical and metallurgical industries, Tawfik said.
(Reporting by Patrick Werr; Editing by Angus MacSwan)
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FILE PHOTO: U.S. President Donald Trump displays his signature after signing the $1.5 trillion tax overhaul plan along with a short-term government spending bill in the Oval Office of the White House in Washington, U.S., December 22, 2017. REUTERS/Jonathan Ernst/File Photo
April 23, 2019
WASHINGTON (Reuters) – A 2017 tax overhaul championed by President Donald Trump will cut household taxes more in Republican-leaning states than in states that lean Democratic, according to research published by the U.S. central bank on Tuesday.
The Tax Cut and Jobs Act, signed by Trump in December 2017, reduced tax rates for most Americans, boosting economic growth in 2018 while widening the federal budget deficit.
Trump has often cited the legislation one of his key achievements, although critics say the law mostly cuts taxes for high-income Americans and corporations. Many Americans are also getting smaller tax refunds or owed money than in the past.
The tax law’s long-term effects will include pushing after-tax incomes 1.6 percent higher in states that tend to vote for Trump’s Republican party, compared to a 1.3 percent gain in Democratic-leaning states, according to research published by the Federal Reserve Bank of Atlanta, one of 12 regional branches of the U.S. central bank.
Households in Democratic-leaning states get less help because the law makes it harder to deduct state and local tax bills from a household’s federal obligations. State and local taxes tend to be higher in states that lean Democratic.
The researchers, which included Atlanta Fed economist David Altig and University of California, Berkeley economist Alan Auerbach, considered states to be leaning Republican or Democratic if one party’s share of the vote averaged at least 5 percentage points higher than that of the other party in the last five presidential elections.
For their estimates, the researchers assumed the tax overhaul would be made permanent. Congress, which was Republican-controlled when the bill was passed, made many of the tax cuts expire after 10 years so that the legislation could pass without Democratic support.
(Reporting by Jason Lange; Editing by Bill Berkrot)
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FILE PHOTO: A Wells Fargo logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith
April 23, 2019
By Imani Moise
DALLAS (Reuters) – Wells Fargo & Co shareholders voted to elect all of the company-nominated directors during a rowdy meeting on Tuesday in which more than a dozen attendees were kicked out for heckling executives and board members.
The majority of the San Francisco-based bank’s 12 board members joined Wells Fargo after the bank became mired in scandal in late 2016 for opening potentially millions of unauthorized accounts. Board Chair Betsy Duke and interim Chief Executive Allen Parker faced questions about why investors should vote for the five directors who were at the bank at the time of the wrongdoing.
All the directors were elected with no less than 95% approval, according to the preliminary tally.
Last month, proxy research firm Institutional Shareholder Services advised “cautionary support” of directors who were at the bank prior to 2017.
About 15 activists were kicked out of the meeting for interrupting Parker’s remarks. He had repeatedly asked them to wait for the question-and-answer segment before having security evict them.
“One of the wonderful things about shareholder democracy is that we have meetings like this,” said Parker as the activists were escorted out.
The activists had spoken out about various issues, including fair lending practices, African American homeownership and fake accounts. Some called Wells Fargo executives “frauds” and said the bank could not be trusted.
Shareholders also approved executive pay and other management proposals. Two shareholder proposals that were rejected called for transparency about incentive pay and closing of the median gender pay gap.
(Reporting by Imani Moise; Editing by Richard Chang)
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FILE PHOTO: The logo of ING bank is pictured at the entrance of the group’s main office in Brussels, Belgium September 5, 2017. REUTERS/Francois Lenoir
April 23, 2019
AMSTERDAM (Reuters) – Shareholders of Dutch bank ING on Tuesday voted against a motion granting executives discharge from legal liability for 2018, the company said, in an apparent rebuke for the $900 million fine the company incurred in September for failing to prevent money laundering.
It was not clear whether any shareholders will actually seek damages over the fine, which ING has said was properly disclosed and which did not have a major impact on the company’s share price. The company said in a statement shareholders had approved other motions at its annual meeting on Tuesday.
(Reporting by Toby Sterling; editing by David Evans)
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FILE PHOTO: The Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 27, 2019. REUTERS/Brendan McDermid/File Photo
April 23, 2019
By Pete Schroeder
WASHINGTON (Reuters) – The U.S. Federal Reserve on Tuesday proposed a framework for determining when a company has taken control of a bank and must face more rigorous oversight and restrictions, a move that could remove hurdles for banks seeking to attract investors and partners.
The new proposal would for the first time establish clear standards for when the central bank considers a company as taking control of a financial institution, which could be a boon for banks and investors who have had to tread cautiously as such determinations previously were made on a case-by-case basis.
A company that gains control of a bank is considered a bank holding company and, as a result, is subject to Fed supervision and a host of restrictions on other business activities.
The Fed’s efforts to clarify its thinking on bank control could help banks looking for new investors or partners, including private equity or fintech firms, without subjecting them to banking regulations and other restrictions, according to analysts.
Randal Quarles, the Fed’s vice chair for supervision, said in a prepared statement the regulator’s prior practice of determining bank control had become “one of the more ad hoc and complicated areas of the board’s regulatory administration.”
“The proposal would improve the transparency of the board’s control framework by placing substantially all of the board’s control positions into a comprehensive public regulation,” Quarles said.
The proposal is largely similar with the Fed’s existing practices on bank control standards, but is now being made formal through a proposed rule, according to Fed officials.
Specifically, the Fed is attempting to write a blueprint for when a company exerts a “controlling influence” over a bank, which can include a combination of factors such as size of investment, number of seats held on the board, and additional business relationships.
Broadly, the proposal requires companies with greater percentages of voting shares in a bank to have less input in other factors.
For example, a company with 15 percent to 24.9 percent of the voting shares in a bank must have business relationships with the bank that amount to less than 2 percent of its revenue or expenses without being considered a controlling interest.
By comparison, a company with just 5 percent to 9.9 percent of voting shares could have a business relationship worth nearly 10 percent of its revenue and expenses.
The Fed board is set to vote on the proposal at an open meeting later on Tuesday.
(Reporting by Pete Schroeder; Editing by Paul Simao)
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FILE PHOTO: Thanathorn Juangroongruangkit, leader of the Future Forward Party attends a news conference to form a “democratic front” in Bangkok, Thailand, March 27, 2019. REUTERS/Soe Zeya Tun/File Photo
April 23, 2019
By Panarat Thepgumpanat and Panu Wongcha-um
BANGKOK (Reuters) – Thailand’s Election Commission on Tuesday accused a prominent anti-junta politician of breaching the election law, moving to disqualify him from parliament almost a month after the disputed March 24 election.
Rising political star Thanathorn Jungroongruangkit, 40, is accused of holding shares in a media company after registering his candidacy, which would violate the election law.
The outcome of the first national election since a 2014 military coup is still unclear. Final results due on May 9 will indicate whether a pro-army party has enough seats to allow junta leader Prayuth Chan-ocha to remain in power.
Thanathorn’s progressive, youth-oriented Future Forward Party came third in the election in a surprisingly strong showing.
His party has joined an opposition “democratic front” with a party loyal to Thaksin Shinawatra, ousted as prime minister by the military, to try to block Prayuth, who led a 2014 coup against a pro-Thaksin government.
The Pheu Thai Party loyal to Thaksin won the most seats in parliament but not a majority. The pro-army Palang Pracharat party came second.
Thanathorn, the heir to an auto parts fortune, has brought a new element to Thai politics that have for 15 years been divided between the royalist-military establishment and the populist “red shirts” linked to Thaksin.
“The evidence has shown that Thanathorn is the owner or a shareholder of V-Luck Media company,” Sawang Boonmee, deputy secretary-general of the Election Commission, told reporters.
“This disqualifies him from having the right to become a candidate for member of parliament based on the constitution and the election law.”
Thanathorn has previously denied breaching electoral law, saying he sold his shares in the media company on Jan. 8, prior to registering as a candidate.
He has seven days to submit evidence to the Election Commission to refute the allegation.
If found guilty, Thanathorn would be banned from running for election for one year. He could also face criminal charges for contesting the election knowing he was ineligible, punishable by up to 10 years in prison and a ban from politics for 20 years.
Thanathorn, who was traveling back to Thailand from the Netherlands, posted on Facebook: “I was just told from Thailand to quickly return to prepare for an unexpected situation. See you in Thailand.”
Thanathorn faces two other criminal charges, one of sedition for allegedly aiding anti-junta protesters in 2015, and another for cybercrime for a speech he made on Facebook criticizing the junta last year.
In a separate legal proceeding, the Thai Supreme Court on Tuesday sentenced former premier Thaksin in absentia to three years in prison for conflict of interest by ordering a state-owned bank to lend money to Myanmar so it could buy products from Thaksin’s own business while he was in office.
Thaksin, who was overthrown by the military in 2006 and lives in self-imposed exile, has already been sentenced to two years in prison in a separate 2008 corruption conviction. He said the corruption cases were politically motivated.
(Reporting by Panarat Thepgumpanat and Panu Wongcha-um; Editing by Robin Pomeroy)
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FILE PHOTO: Jet Airways aircraft are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai, India, April 18, 2019. REUTERS/Francis Mascarenhas/File Photo
April 23, 2019
MUMBAI (Reuters) – India’s Jet Airways is constantly engaging with the government and lenders for a resolution of the current debt crisis and will not leave any stone unturned to revive the airline, its chief executive officer Vinay Dube told television channel ET Now in an interview.
Once India’s largest private airline, Jet halted all flight operations indefinitely last Wednesday evening after lenders led by State Bank of India declined to extend more funds to keep the carrier going.
“We are in constant touch with the lenders on how to get it (debt resolution) done in a manner that makes sense for them and makes sense for us,” Dube told ET Now.
“But I would like to think that a flying Jet Airways makes definite sense for them (banks) because it preserves their value as well. So we are not talking about anything that does not make good economic sense for the lenders, this is not charity for the sake of it”.
The company has requested banks for 10 billion rupees ($143.29 million), Dube said.
Earlier in the day, newspaper Business Standard reported that all shortlisted bidders for the company had backed out of the bidding process that is due to complete on May 10.
Dube, however, said he was hopeful of finding a keen, healthy investor who can inject the requisite amount of equity into the company.
The government plans to form a committee to temporarily allocate takeoff and landing slots left vacant by the grounding of Jet Airways flights, a senior official said last week.
Dube, however, said the government had assured the airlines this was a temporary move and the slots will be protected for the airline once they start flying again.
“While we have a combination of aircraft that are being deregistered or early terminated, the majority of them have not left the premise,” Dube said referring to the aircraft and said they will be available to the airline when it starts flying again.
“We understand the banks’ position. This is a financial proposition for them as well and we are in constant touch with them and we will be. For us there is no stone that we will leave unturned. We believe in Jet Airways, we will do whatever we can to make other people also believe in us.”
(Reporting by Swati Bhat; Editing by Rashmi Aich)
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