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NOT UP IN HERE
Wells, Wells, Wells, look who’s in the news again. Tim Sloan is out and Alan Parker is in as CEO at Wells Fargo. Sloan will step down immediately and retire officially in June.
C. Alan Parker will serve as interim CEO while Wells searches for a replacement. Presumably, somebody that once attended superday at Goldman. Parker was most recently the bank’s general counsel. He joined the fledgling financial institution shortly after the 2016 sales scandal broke from Cravath, Swaine & Moore LLP.
A tenure under pressure
Sloan ends his 31-year career at the bank, having spent the previous 2 ½ years at the helm under immense pressure stemming from the bank’s numerous scandals. He seemingly couldn’t catch a break. He oversaw numerous fake account scandals, crippling growth restrictions handed down by the Fed, a computer glitch that cost customers their homes, and the payment of billions of dollars in fines.
And they aren’t the only ones celebrating. The Office of the Comptroller of the Currency was considering forcing the bank to shake up its senior management and board. And when asked about Timmy Scandals departure, Senator Elizabeth Warren had this to say: its “about damn time.”
NO ONE’S SAFE
Nomura and JP Morgan are among those feeling the effects of a recent pullback in the financial services industry due to the rise of automation and technology, while Deutsche Bank’s potential merger with Commerzbank paves the way for thousands of job cuts.
Market volatility and shifting investor sentiment for passive, low-fee funds, are to blame for the global financial industry’s insatiable thirst for technology. F*cking nerds.
Trim the fat
JPMorgan will cut “hundreds” of support jobs globally in the asset and wealth management space after a staffing review. Pour one out for Karen from compliance. For what it’s worth, staffing reviews are as common as strippers and cocaine on Wall Street, especially in the early months of the year, and don’t always indicate a full job market downturn.
Nomura, on the other hand, is cutting 100-ish jobs from its trading and investment banking businesses in the US and Europe as it struggles to profit in the region. You see, buying Lehman Brother’s European assets in 2008 hasn’t exactly panned out.
So, what’s up with Deutsche Bank?
Meanwhile, with 30k possible job cuts hanging over Deutsche Bank (and Commerzbank) like a stale fart, plans have emerged to launch a digital platform that would allow DB to trade stocks directly with firms, rather than matching buyers and sellers. Deutsche has had issues with falling profits, leading the firm to look for other sources of revenue that don’t include panhandling.
WOW … THAT SUCKS
Budget airlines have had a rough go at it lately. Even if the low fare operators can afford Boeing safety upgrades, they face headwinds in the form of fuel prices and stiff competition.
The latest victim of an ongoing European fare-war is WOW Air, an Iceland-based budget airline. WOW isn’t alone, with eight European airlines failing since the summer, but it does seem to have a flair for the dramatic that its competition lacks.
You see, Owen Wilson’s favorite airline didn’t just cease operations, it went down in a blaze of passenger-angering glory (ok maybe not the best word choice). WOW called it quits mid-flight, going out of business without warning, leaving more than 2.7k passengers on 29 flights either stranded or sh*t out of luck.
Unsurprisingly WOW went radio silent after telling passengers to seek other travel options. Thank you, Capt. Obvious. Icelandair, WOW’s biggest competitor in the country whose biggest export is tourism (we see you, ‘Game of Thrones’), did its best up to carry the load, offering discounted tickets to WOW passengers.
But maybe we should have seen the writing on the wall …
Not unlike the AAF, WOW’s leadership was scrambling to secure funding ahead of today’s news from Icelandair and PE shop Indigo Partners. The airline had already delayed the inevitable by convincing bondholders to convert debt into equity but alas it was leasing companies which pulled the plug on WOW’s big old jet airliners that appears to have been the final nail in the coffin.
IN OTHER NEWS
- Despite losing boatloads of money, Uber’s #1 (US) competitor won the race to public markets and set its IPO price at $72 for its debut this morning. This is a huge win for Lyft which was once an afterthought in the ride-hailing wars, as many in the know believed Uber’s commanding lead was too large for Lyft to overcome. Fast forward a few Uber scandals and one CEO later and Lyft is much more than a speedbump in Uber’s path to US supremacy.
- Come and get it. Drugmakers Purdue Pharma, Johnson & Johnson, and McKesson Corp. could be in a heap of trouble. The New York Attorney General is suing six opioid manufacturers and four distributors for illegally marketing and unlawfully diverting OxyContin to the point that it created a drug epidemic in New York State. Purdue recently settled the same charge put forward by the state of Oklahoma for $270M, while J&J and McKesson are seeing it through to court.
- Swedbank fired its CEO yesterday after uncovering a $151B money laundering scandal was afoot. Birgitte Bonnesen got the boot after Swedish police raided Swedbank’s offices on Wednesday in connection to suspicious activity with, who else, Russia. This is the second Nordic CEO to be ousted in the last year thanks to sketchy dealings with their comrades to the east. Danske Bank’s Thomas Borgen was shown the door back in September.
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