Banks are conducting record-breaking bond offerings after posting strong first-quarter earnings, with total issuance estimated at $40 billion and offerings that include $13 billion and $15 billion sales from JPMorgan Chase and Bank of America, respectively. Analysts attribute the surge to federal relief and low interest rates, which encourage borrowing.
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Banks are becoming more interested in mergers and acquisitions as credit quality improves alongside the economic recovery. However, some financial institutions such as Zions Bankcorp and Synovus Financial aim to achieve growth organically.
First Horizon's merger with Iberiabank last year drove a $10 million increase in annual revenue. First Horizon's Q1 earnings dropped 4% overall, with the decline attributed to merger-related expenditures.
Discover Financial Services' new income grew by $1.6 billion during the first quarter due to "strong credit performance, robust sales growth, and solid execution on operating and funding costs," said CEO and president Roger Hochschild. The company had reported a $61 million net loss during the first quarter of 2020.
Establishment banks can take a number of steps to ensure they remain competitive in the payments space, according to Finextra Research. These include rethinking how they view data, embracing alternative payment methods, leveraging the trust associated with their brands and partnering with fintechs.
Amazon is piloting a payment system at one of its Whole Foods stores that enables customers to pay with a scan of their palm print linked to a payment card. Amazon aims to use the system, called Amazon One, for payments and access to premises.
Treasury Secretary Janet Yellen says US efforts to align with other nations in securing a low-carbon economy "require bold and urgent action -- nothing less than transforming important sectors of the global economy, especially when it comes to how we generate power and move people and goods." In a separate speech, Yellen has said companies that commit to ambitious carbon-reduction targets are making a valuable contribution to the transition by helping financial institutions manage associated risk "while sending a powerful signal to global financial markets."
The Department of Justice has reportedly established a task force aimed at combating the rising use of ransomware attacks by cybercriminals. An internal memo reportedly says the task force will work to increase department resources, training and intelligence sharing related to ransomware attacks.
Republican lawmakers say efforts by US officials to pressure lenders into cutting off financing for fossil fuel companies amount to politicization of the banking industry. A group of 44 House Republicans and another 12 Senate Republicans have issued separate letters this week decrying such efforts.
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