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Reuters
25 minutes ago
- Business
- Reuters
US bank M&A hopes revive under Trump regulators
NEW YORK, July 14 (Reuters) - Takeover speculation in Northern Trust (NTRS.O), opens new tab has revived industry hopes of deals among large U.S. and regional banks, propelling exploratory conversations that could lead to consolidation, according to financial executives and analysts. Talk of potential mergers and acquisitions among Wall Street banks and large regional lenders has increased in recent weeks in a major shift under the Trump administration after regulators under the Biden administration opposed or blocked big deals, according to three senior financial executives who declined to name specific talks or be identified, citing confidential discussions. On Thursday, the Federal Reserve proposed changes to how it evaluates large banks, making it easier for firms to maintain a "well managed" rating by requiring deficiencies across multiple categories before being downgraded. The move could be a boon to bigger bank dealmaking, as firms not considered "well managed" are barred from any acquisitions. "What we've seen from a regulatory standpoint is a lot more clarity and ... a return to a more permissive environment," particularly for mergers, said James Stevens, a law partner who advises financial institutions at Troutman Pepper Locke. Regulators' moves to streamline deal approvals "certainly opened the doors more towards those bigger banks talking about getting together," he said. The sources said that bank executives in recent weeks have become newly emboldened to consider ambitious plans to buy business units, or even entire companies. That increased interest came after BNY (BK.N), opens new tab approached Northern Trust (NTRS.O), opens new tab to express interest in a merger, the Wall Street Journal reported last month, although the target has said it wants to remain independent. Meanwhile regulators approved Capital One's (COF.N), opens new tab $35.3 billion purchase of Discover Financial Services in April. BNY will report earnings on Tuesday alongside JPMorgan, Wells Fargo and Citigroup. The companies will likely be quizzed about their appetite for M&A during analyst calls. BNY and Northern Trust declined to comment. Dealmakers expect bank M&A activity to climb in the second half of the year. Activity has been broadly flat this year, with 57 deals struck in the first five months of 2025, compared with 56 a year earlier, and was concentrated mostly among smaller lenders, according to data from S&P Global Market Intelligence. Major banks seeking selective, or bolt-on acquisitions that add operations such as wealth management, fintech or crypto, will find it easier to get approval from regulators, one of the executives said. But larger mergers involving entire banks that serve similar geographies are more likely to face government scrutiny, including from antitrust authorities, the executive said. Regional lenders are more likely to get the green light for transactions, said Tom Michaud, CEO of investment bank Keefe, Bruyette & Woods. "There is a clear case for gaining scale, and people are realizing this administration gives them the best chance of getting a large deal approved," Michaud said. "So it's better to do it sooner than later," he said, expecting regional lenders to strike deals more quickly than banking giants. The other three industry executives concurred that deals by so-called super regional banks were most feasible. They cited PNC Financial Services (PNC.N), opens new tab, U.S. Bancorp (USB.N), opens new tab and Truist Financial (TFC.N), opens new tab as potential participants. Truist and U.S. Bancorp declined to comment. PNC CEO Bill Demchak said in June that he expected consolidation in retail banking to boost industry profits. Meanwhile, Gunjan Kedia, who became U.S. Bancorp CEO this year, said in February that it was focused on organic growth and ruled out M&A "for now." For the six biggest U.S. lenders deemed by regulators as global systemically important banks, or GSIBs, there are bigger hurdles. JPMorgan Chase (JPM.N), opens new tab and Bank of America (BAC.N), opens new tab, the first and second-largest lenders in the U.S., each hold more than 10% of the nation's deposits and are capped from buying companies that store them. Still, JPMorgan purchased several fintech firms and BofA bought loan portfolios in recent years. Wells Fargo (WFC.N), opens new tab has only recently got out from under key regulatory punishments, while Citigroup (C.N), opens new tab is still under regulators' orders to fix widespread deficiencies in risk management. That leaves Morgan Stanley (MS.N), opens new tab and Goldman Sachs (GS.N), opens new tab as the largest lenders that could pursue the most traditional M&A deals, the three industry executives said. All the six large banks declined comment. The Federal Reserve's new Vice Chair for Supervision, Michelle Bowman, is expected to facilitate deals because of her support for lighter regulation, the three industry executives said. Regulators are generally going to be open to large institutions expanding, but the approval process will remain extensive, said Katie Cox, a consultant CoxFedLaw who previously served as an M&A expert at the Fed. Participants need to show they meet financial and compliance ratings and hold public consultations, Cox said. The process takes at least a year and could probably be sped up to nine months, she added. Regulators would also weigh how combining banks would affect financial stability, and "that's going to be the problem for the G-SIBs -- if the acquisition of any target is going to exacerbate their current financial stability position in the U.S. markets," she said. "And then there's the competition and antitrust rules." Bankers point to a 2023 example as a cautionary tale of the Biden era's skepticism toward deals. After more than a year of waiting for regulatory approvals, Toronto-Dominion Bank ( opens new tab called off its $13.4 billion takeover of First Horizon (FHN.N), opens new tab, triggering a near 40% fall in the latter bank's shares. Industry executives were still watching BNY, which also has GSIB status, to see whether it will continue to pursue Northern Trust or set its sights elsewhere. The approach is being seen as a test case for the administration's openness to GSIB deals, which could reshape the industry because they involve the biggest and most complex institutions, the three executives said.
Reuters
26 minutes ago
- Business
- Reuters
A slew of T-bills coming? Money market funds say 'bring 'em on'
NEW YORK, July 14 (Reuters) - More than $1 trillion in U.S. short-term bills are expected to flood the market over the next 1-1/2 years following the increase in the debt ceiling, as the Treasury replenishes its diminished cash balance while funding the country's huge fiscal deficit. There is, however, no shortage of buyers, with money market funds leading the way. Armed with a record $7.4 trillion in assets as of July 1, money funds, which invest in short-term, low-risk securities such as Treasury bills and repurchase agreements, or repos, are ready to take on more supply. The debt ceiling increased by $5 trillion to $41.1 trillion two weeks ago following the signing into law of the "One Big Beautiful Bill." The Treasury's operating balance had dropped to $313 billion on July 3, data from money market research firm Wrightson ICAP showed, the day before President Donald Trump's tax and spending bill was enacted. Treasury bills are critical to financial markets and the broader economy, given their role as safe and liquid assets, and are a key tool for funding government spending. In turning to short-term debt to fill its coffers, U.S. Treasury Secretary Scott Bessent had said it does not make sense to increase long-term bond sales at current interest rates. The Federal Reserve has kept the benchmark federal funds rate in the 4.25%-4.50% range since December. J.P. Morgan, Barclays, and TD Securities have estimated new issuance of Treasury bills alone over the next 18 months of between $900 billion and $1.6 trillion, higher than their initial projections before the debt ceiling resolution. "It sounds like a large amount of issuance coming from the Treasury, but we welcome it and feel that we will have no trouble accommodating it," said Susan Hill, senior portfolio manager and head of the government liquidity group at Federated Hermes, with assets under management of $631.1 billion. The firm has a suite of government and prime money market funds. Bank estimates on short-term supply over the next 1-1/2 years, however, paled in comparison to Treasury bills issued following the last debt ceiling saga two years ago. The Treasury had issued $1.1 trillion in three months from June 2023, as it reloaded its cash account that had dwindled to just $23 billion. Lou Crandall, Wrightson's chief economist, said the Treasury is in a much stronger position now than in 2023. "The debt ceiling impasse didn't go down to the wire this time, so they're starting out with $300 billion more in cash," said Crandall, providing ample cushion for the Treasury. Still, this year's projected T-bill supply exceeds that of past debt ceiling events. In 2011, the Treasury issued about $300 billion in T-bills in the months following the debt limit increase in August 2011. In 2013, the Treasury issued roughly $400 billion in bills by the end of that year. Fast forward to 2025, and bank estimates of additional T-bill supply for the next five months ranged from $650 billion to $830 billion. With the spending bill's approval, the Treasury last Tuesday raised the size of last week's four-week and eight-week bill auctions by a larger-than-expected $25 billion each to $150 billion for both offerings. It also announced another $225 billion in three T-bill auctions scheduled this week. Those increases are likely to represent the bulk of adjustments for bill auction sizes for July, although the Treasury might not be quite done yet. "There's plenty of money market funds that had been avoiding maturities like those on August bills (due to the debt ceiling restrictions), so that part of the curve is going to be pretty well subscribed," said Jan Nevruzi, U.S. rates strategist, at TD Securities. There is just one hitch. The Fed's overnight reverse repo (RRP) facility, where money market funds park their excess cash, has fallen sharply to $182 billion as of July 11, from a peak of $2.5 trillion in December 2022. Without that excess cash sitting in RRPs, market participants wondered how money funds would absorb more Treasuries if they are fully invested. In 2023, money funds used that buffer sitting in RRPs to buy a deluge of T-bills in the market. In a reverse repo, investors lend overnight cash to the Fed at a 4.25% interest rate in exchange for Treasuries or other government securities, with a pledge to buy them back. The Fed's ongoing quantitative tightening, a process that shrinks its balance, allowed Treasuries and mortgage-backed securities to mature without reinvestment. That drained liquidity from the financial system and reduced excess cash that previously flowed into RRPs. Analysts, however, said money market funds will likely reallocate out of regular repos into T-bills. Repos have grown to 37% of money funds' assets, J.P. Morgan said in a research note. "The overall portion of money fund investments in the repo market is still quite large, so it becomes more of a decision of going out of that normal repo transaction into Treasury bills if the value is there," said Hill of Federated Hermes. Currently, three-month T-bills are yielding 4.353% , higher than the Secured Overnight Financing Rate, a repo rate, of 4.31%. Analysts also pointed to money market funds' continued appeal to investors that should further propel the growth in their assets, which means more cash for T-bills. Money market yields are 170 basis points higher than bank deposits, a historically wide spread, wrote Samuel Earl, U.S. rates strategist at Barclays. Households, which have $10 trillion in time deposits and savings accounts, are likely to continue to move deposits at banks into money funds, he added.
Reuters
38 minutes ago
- Business
- Reuters
Australia's CSL plans to cut one-third of R&D workforce, AFR reports
July 14 (Reuters) - Australian biotech giant CSL ( opens new tab may lay off around one-third of its 2,500 research and development staff to streamline its operations and improve efficiency, the Australian Financial Review reported, opens new tab on Monday, citing an unnamed source. CSL did not immediately respond to a Reuters request for comment. CSL's head of R&D, William Mezzanotte, briefed staff of the move earlier this month, but the details will not be outlined to the market until the company releases its full-year results on August 19, AFR added. Mezzanotte reportedly said the company would consolidate its R&D teams at six sites, including Melbourne, and increasingly rely on external partnerships and possible acquisitions to fill any gaps, according to AFR. "We are streamlining the R&D organisation to foster collaboration, reduce duplication and improve efficiencies, and we are simplifying our operating mode," a CSL spokesman said, as per the AFR. CSL was established more than a century ago as a government laboratory focusing on manufacturing vaccines. It went public in 1994, and became one of the most valuable companies in Australia through the decades, largely due to its plasma collection business. CSL has invested around $5.8 billion in its R&D division over the past five years, which underpins its core businesses, including its most profitable plasma unit, CSL Behring. The company continues to expect annualised double-digit earnings growth over the medium term, as of February, even as its profit growth slowed in the first half of fiscal 2025.
Reuters
39 minutes ago
- Business
- Reuters
Crypto exchanges rushed to list Trump's coin - leaving many losers and some big winners
NEW YORK, July 14 (Reuters) - Crypto exchange Coinbase assures users on its website that it puts any new digital coin through "rigorous" vetting before allowing it to trade. It's an at-times lengthy process meant to protect customers by examining the people connected to the project and the risk of market manipulation or other scams. With President Donald Trump's crypto token, $TRUMP, Coinbase made up its mind in just one day. The $TRUMP token, which launched three days before his inauguration in January, is a meme coin. Based on cultural fads or celebrities, these coins have no intrinsic value and – past experience has shown – are prone to large price swings that can leave investors with losses. A Reuters analysis of crypto market data and industry announcements found that, compared to other recent large meme coins, the biggest crypto exchanges took Trump's to market with unusual speed, despite stating they vet risky coins thoroughly to protect small investors. Some also approved the listing in spite of the high share of coins concentrated in the hands of Trump and his partners, which would normally represent a red flag because of the risk that dumping of tokens by insiders could collapse the price and hurt other investors, some executives said. After reaching an all-time high of $75.35 on April 19, just two days after its launch, $TRUMP crashed to the $7 range by early April, leaving many holders nursing losses. It was trading around $9.55 Thursday. "When the president of the United States launches a meme coin, I thought I might as well put some money inside," said Carl 'Moon' Runefelt, a Dubai-based crypto investor who runs a bitcoin trading channel on YouTube called the "Moon Show." Runefelt said he bought $300,000 worth of the meme coin in tranches at between $50 and $60: "It's probably one of my worst trades, unfortunately." The Reuters analysis showed that eight of the 10 largest crypto exchanges by market share listed the coin within 48 hours of its release. The ninth, Coinbase, added $TRUMP to its listings roadmap on January 18 – indicating it had decided to accept it - and listed the coin three days later. The tenth, Upbit, listed $TRUMP on February 13. That was much faster than they've done on average with the biggest meme coins. Reuters examined how long it took the same 10 exchanges - Binance, Bitget, MEXC, OKX, Coinbase, Bybit, Upbit, and HTX - to list the four other largest meme coins launched since 2022. These, measured by market cap on May 29, are Pepe, Bonk, Fartcoin and dogwifhat. All 10 exchanges listed Pepe and Bonk. Nine listed dogwifhat, and seven listed Fartcoin. On average, the 10 exchanges took 129 days to list those coins. For $TRUMP, they took an average of four. Asked for comment about why they listed $TRUMP so quickly, Bitget, MEXC, OKX, Coinbase and Upbit all said they had not cut any corners with their vetting process. The other five exchanges did not respond to Reuters' questions. Three – Bitget, Coinbase, MEXC – said they moved fast to respond to overwhelming demand for the $TRUMP coin. "The crypto space was buzzing with the hype and, as any other token with a growing craze, it was imperative to add TRUMP," Gracy Chen, Bitget's CEO, said in a statement. Chen said the fact that Trump himself announced the coin on his social media accounts "should kind of solve the compliance issue," citing the fact that "he's the president of the United States." Reuters found no suggestion that Trump or anyone related to his businesses exerted pressure on the exchanges. In response to a request for comment, a White House press official told Reuters the president's assets had been placed in a family trust: "There are no conflicts of interest because the president isn't managing the assets. Any insinuation that there is a conflict of interest is irresponsible." The official referred specific questions about the meme coin to the Trump Organization, which did not respond to Reuters. Coinbase said the $TRUMP token got no special exceptions and the exchange followed its normal process when listing the coin. Paul Grewal, Coinbase's chief legal officer, said many people had to work over the weekend to get the listing done quickly, but no steps were skipped. "Given the information that was shared publicly, we were confident that users could engage with the token positively and safely," Grewal told Reuters. Coinbase listed $TRUMP as an "experimental" token to indicate it comes with "certain risks, including price swings," according to the company's website. The vetting of coins often focuses on how well-known the issuer is, how likely they are to remain in the public eye and how much they engage with the online community to sustain interest in the coin, metrics that $TRUMP would score highly on, according to Santa Clara University finance professor Seoyoung Kim, who specializes in crypto analytics. She cautioned that focusing on vetting speed alone could provide an incomplete picture of investor protection. A more holistic analysis, Kim said, would also involve factors such as the average market cap at which a coin is listed, for how long it has sustained that level before its listing, and its daily trading volumes. With $TRUMP listed so soon after launch, there was little such data for exchanges to parse. $TRUMP's market cap has since fallen to around $1.9 billion, down sharply from its peak above $15 billion on January 19. But that still ranks it amongst the largest meme coins launched since 2022. Reuters ran its listing-speed analysis past five academics with crypto expertise, including Kim, who all said its methodology was sound. David Krause, Emeritus Professor of Finance at Marquette University, who has studied Trump's crypto ventures, said the quickness of the $TRUMP listing "suggests either a dramatic acceleration of due diligence or corners being cut." "Either scenario has significant implications for investor protection and market integrity," he said. The president's rush of business ventures in a lightly-regulated sector that his government is responsible for overseeing has drawn criticism from Democrats, consumer advocacy groups and former financial enforcement officials. "You don't say no to hosting the president's new meme coin," said Corey Frayer, a former senior crypto advisor at the U.S. Securities and Exchange Commission. Frayer is now director of a non-profit advocacy group, the Consumer Federation of America. "The president controls who oversees your business and how they enforce the law." Under former President Joe Biden, the SEC maintained that most crypto tokens, including meme coins, should be regulated as securities, making exchanges cautious about listing them. That began to change, quickly, after Trump was elected last November. The Republican has styled himself as the "crypto president," pledging to overhaul regulation of the sector. Following Trump's election, Coinbase – the largest publicly traded crypto exchange in the United States – and several of its rivals began listing more meme coins. In Trump's second term, the SEC has paused or withdrawn high-profile enforcement actions against crypto operators, including a major investor in a Trump family crypto project, and issued a staff statement concluding that meme coins do not constitute securities. An SEC spokesperson declined to comment on the agency's crypto policy and Trump's coin. Trump's family has launched multiple crypto ventures, raking in hundreds of millions of dollars. The $TRUMP token quickly earned an estimated $320 million in fees, though it's not publicly known how that amount has been divided between a Trump-controlled entity and its partners. Exchanges have been major beneficiaries of Trump's embrace of the industry. $TRUMP has generated significant revenue for the 10 exchanges in Reuters' review: more than $172 million in trading fees, according to estimates based on standard fees compiled for the news agency by CoinDesk Data, a crypto industry data provider. Trade in the coin, meanwhile, has favored a small group of investors. At the top, 45 crypto wallets cleared about $1.2 billion in profits overall, while another 712,777 wallets have collectively lost $4.3 billion, according to trading data analyzed by crypto analysis firm Bubblemaps as of June 18. In the middle, more than half a million wallets made an average of $5,656 profit each. In listing $TRUMP, some exchanges proceeded despite a factor they'd previously labelled as a red flag: 80% of the coin's supply was held by the Trump family and its partners. Such a high concentration of ownership can allow the team behind a coin to sell large amounts of it at once, collapsing the price for retail investors. The terms of the $TRUMP coin specified that its total supply would be gradually unlocked over three years after initial release. On January 16, the day before $TRUMP was released, the New York State Department of Financial Services issued an alert to consumers about the risks of meme coins. Such coins, the notice said, are carried by platforms not licensed by the state and the supply of the digital tokens is often controlled by a small number of people. That opens the door to "pump-and-dump schemes," the regulator noted, in which public hype by their issuers leads to a jump in price – with big, early investors exiting and smaller retail buyers left holding the losses that follow. The NYDFS declined to comment beyond the guidance. Coinbase, which is subject to New York regulations, blocked state residents from accessing the token, but allowed U.S. customers elsewhere to trade. To list $TRUMP in New York, the exchange would have faced a long list of risk assessment and governance requirements. Some other exchanges acknowledged they looked past concerns about the concentration in a bid to serve customer demand. MEXC's chief operating officer, Tracy Jin, told Reuters that, because of the concentration of tokens, $TRUMP did not meet its usual standards for a full listing on its main board, but the exchange pushed ahead anyway due to strong demand. In a follow-up written statement, an MEXC spokesperson said that a "faster-than-usual" listing was possible because the coin had clear market momentum and it met "our listing standards early." Commenting on the Reuters listing-speed analysis, the spokesperson said market conditions and demand for political meme tokens had changed since 2022, "making direct comparisons less relevant." Bitget also had concerns about the 80% figure, CEO Chen told Reuters. "Eighty percent held by the team, even though there's a little bit of a lock-up period, is in my opinion very risky," said Chen. "Ultimately, user trading volume, demand … overrode the so-called risky factor here." Like some exchanges, Bitget, based in the Seychelles, does not have a business presence in the U.S. or serve clients who reside there, Chen said. "Globally," she added, "people are generally aware of the risks associated with trading meme coins." Upbit, which operates in South Korea, said it does not comment on specific coin listings but that it has "a rigorous and comprehensive evaluation process." Erald Ghoos, CEO for Europe of OKX, said the exchange's legal and compliance teams stayed up all night over different time zones to work on the listing. Seychelles-registered OKX says its diligence process requires "meticulous preparation." It decided to list $TRUMP within 26 hours.
Reuters
39 minutes ago
- Business
- Reuters
Indian investors flock to silver as returns overtake those from gold
MUMBAI, July 14 (Reuters) - Indian investors, traditionally obsessed with stockpiling gold, are increasingly turning to silver , which was trading near a 14-year high on Monday, as its returns this year outpaced those of gold. Imports fill most of the demand in the world's largest consumer of silver, where domestic prices touched a record high of 114,875 rupees ($1,336) a kg as a production shortfall spurred investors' hopes for a further rally. "Gold's done pretty well for me over the last couple of years," said Umesh Agarwal, a regular buyer of gold coins, who recently made his first purchase of a one-kilogram bar of silver. "Now I'm hoping silver follows the same path and gives similar returns." Domestic prices of silver have risen 21% in the past three months, outstripping a rise of 5% in gold, as opposed to the scenario of the past year, when gold prices surged 34%, compared to a rise of 23% in silver. The appetite for silver is driven both by investment and industry needs in areas such as solar energy and electric vehicles, outpacing production, said Chirag Thakkar, chief executive of Amrapali Group Gujarat, a leading silver importer. "Usually, investors cash in when prices hit record highs, offloading coins and bars or pulling out of exchange-traded funds (ETFs)," he added. "However, this time, even at record highs, people are investing, rather than selling." Silver ETFs attracted inflows of a record 20.04 billion rupees in June, up from 8.53 billion in May, data from the Association of Mutual Funds in India showed. In the June quarter, silver ETFs attracted inflows of 39.25 billion rupees, far outpacing the 23.67 billion flowing into gold ETFs. Such ETFs offer investors a convenient way to gain exposure to silver, which is heavy and costly to store and transport, said Vikram Dhawan, head of commodities and fund manager at Nippon India Mutual Fund, which manages metal ETFs. Volatility in equity markets following U.S. President Donald Trump's tariffs has also pushed investors to diversify, said a Mumbai-based bullion dealer with a silver importing bank. Traditionally the choice of budget-conscious rural consumers, silver is increasingly attracting urban buyers as an investment, the dealer added. Indian retail investment demand rose 7% in the first half of 2025 on the year, fuelled by expectations of a price rally, the Silver Institute said this month. Silver imports jumped 431% in May on the year to 544.1 tons, while gold imports fell 25% to 30.5 tons, trade ministry data showed. ($1=85.9780 Indian rupees)
