Deutsche fires 100 senior bankers, water becomes a battleground for hedge funds, wellness industry worth trillions, and more.
News from November 7 - November 14, 2024
Deutsche Fires 100 Senior Bankers
Deutsche Bank fired 111 senior managers in its retail and wealth unit as part of a cost-cutting strategy led by Claudio de Sanctis who took charge of the unit in the middle of 2023. The goal is to lower the division’s cost-to-income ratio from 77% to 60-65% by 2025.
The unit, underperforming for years, contributes 31% of revenue but only 23% of profit. De Sanctis is closing branches, cutting external consultants, and slashing senior staff.
Despite recent cuts, De Sanctis plans to hire new relationship managers in 2025 to boost revenue, admitting that further cost reductions in wealth management have reached their limit this year.
Source
Binance Boss Hails Crypto ‘Golden Age’
Binance CEO praised Trump’s win as a turning point, dubbing it a “golden age” for crypto. Industry leaders see the election as a chance to reverse strict Democrat-led regulations and welcome a wave of new pro-crypto lawmakers. Bitcoin hit a record high, driven by expectations of a friendlier stance from the White House.
Crypto firms, having spent $170 million lobbying, now aim to reshape rules at the SEC. The industry hopes to replace aggressive enforcement with a framework that encourages big banks and investors, anticipating a surge in institutional interest and market growth under the new administration.
Source
Water Becomes a Battleground for Hedge Funds
Hedge fund Elliott Management is battling for control of Thames Water, buying its troubled debt and backing a £3bn emergency loan. Rival investors have pitched a competing offer with lower interest, sparking a fight.
Thames Water, once a safe investment, is now a target for hedge funds after major financial trouble. The high debt costs and risks of government takeover have turned the company into a battleground, as investors fight to make profits and gain control.
For everyday customers, Thames Water’s financial struggles could lead to higher bills and reduced infrastructure upgrades, risking poorer service quality and potential disruptions. Thames Water is pushing regulators to approve a 53% utility price increase by 2030.
Source
Bulletin Board
- SoftBank Returns to Profit. SoftBank posted a ¥1.2tn ($7.8bn) quarterly profit, driven by successful IPOs in India and higher tech valuations, beating forecasts after previous losses. The tech-heavy Vision Funds reported positive gains, aided by strong Indian IPOs and rising valuations in Coupang and DiDi. CEO Masayoshi Son is eyeing aggressive AI investments, including $500 million into OpenAI, and setting up a potential rivalry with NVIDIA, especially as Arm, SoftBank’s chip unit, plans to enter AI chip production. Source
- Wellness Industry Worth Trillions. The global wellness industry reached $6.32 trillion in 2023, up 25% from 2019, surpassing the sports and pharmaceutical industries. Growth was driven by rising demand for health-focused products, aging populations, and increasing mental health awareness. The largest segments were personal care ($1.21 trillion), healthy eating ($1.09 trillion), and physical activity ($1.06 trillion). Wellness real estate surged with an 18.1% growth rate. Expanding rapidly post-pandemic, the wellness industry could hit $6.8 trillion by the end of 2024. Source
- Metro Bank Fined £17 Million. Metro Bank was fined £16.7 million by the UK’s Financial Conduct Authority (FCA) for failing to address serious flaws in its anti-money laundering system. The automated transaction monitoring system, installed in 2016, had issues that left 60 million transactions unchecked, worth over £51 billion. Despite junior staff raising concerns early on, the problems persisted until 2020. Metro Bank later reviewed the missed transactions, filing 153 suspicious activity reports. The fine marks another regulatory crackdown following similar action against Starling Bank, highlighting the FCA’s focus on strengthening financial crime controls at newer UK banks. Source
- Citadel is a Money Making Machine. Citadel Securities, under Ken Griffin, dominates U.S. trading, executing 25% of stock trades and generating huge profits. The firm’s aggressive expansion targets new areas like corporate bonds and China’s market. It leverages exclusive trading flow data—a practice banned in Europe—giving it a major edge. Despite concerns from regulators who struggle to grasp its complex, cutting-edge operations, Citadel’s influence and profits continue to grow, positioning it as a financial powerhouse reshaping the market landscape. Source
- Microplastics Are Infesting Clouds. Microplastics are now found in clouds, potentially reshaping our weather. Penn State researchers discovered that these tiny particles, which are everywhere from human bodies to ancient relics, seed ice crystals at warmer temperatures, disrupting rainfall patterns. They could make it rain less often but with heavier downpours. This means microplastics, spread across the globe, may unintentionally control when and how it rains, adding to their alarming reach. The study’s findings raise serious questions about how these pollutants might be altering our climate in unexpected and harmful ways. Source
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