Springleaf, the second largest provider of personal installment loans in the US, is to buy its biggest competitor OneMain.
Sprinleaf has been given permission to buy OneMain from parent company Citigroup, provided it sells 127 of its own branches.
The new company would be left with more than 1,800 branches nationwide.
Both comapnies provide personal loans of under $6,000, which have a set number of scheduled payments lasting between a few months and a few years.
Springleaf announced its plan to buy OneMain for $4.25 billion in March.
The deal hit a snag when US authorities claimed the tie-up could make it harder for people with poor personal financial ratings living in 11 states to access lines of credit.
The agreement reached on November 13 with the Department of Justice and state regulators ends an anti-trust lawsuit.
JPMorgan, UBS, Barclays, Citigroup and RBS have been fined $5.7 billion in the US for charges including manipulating the foreign exchange market.
Four of them – JPMorgan, Barclays, Citigroup and RBS – have agreed to plead guilty to US criminal charges.
UBS will plead guilty to rigging benchmark interest rates.
Barclays was fined the most, $2.4 billion, as it did not join other banks in November to settle investigations by UK, US and Swiss regulators.
The bank is also sacking eight employees involved in the scheme.
US Attorney General Loretta Lynch said that “almost every day” for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates.
Their actions harmed “countless consumers, investors and institutions around the world”, Loretta Lynch said.
Separately, the Federal Reserve fined a sixth bank, Bank of America, $205 million over foreign exchange-rigging. All the other banks were fined by both the Department of Justice and the Federal Reserve.
Regulators said that between 2008 and 2012, several traders formed a cartel and used chat rooms to manipulate prices in their favor.
One Barclays trader, who was invited to join the cartel, was told: “Mess up and sleep with one eye open at night.”
Several strategies were used to manipulate prices and a common scheme was to influence prices around the daily fixing of currency levels.
A daily exchange rate fix is held to help businesses and investors value their multi-currency assets and liabilities.
Until February, this happened every day in the 30 seconds before and after 16:00 in London and the result is known as the 4pm fix, or just the fix.
In a scheme known as “building ammo”, a single trader would amass a large position in a currency and, just before or during the fix, would exit that position.
Other members of the cartel would be aware of the plan and would be able to profit.
The fines break a number of records. The criminal fines of more than $2.5 billion are the largest set of anti-trust fines obtained by the Department of Justice.
Meanwhile, the $925 million fine imposed on Citigroup by the Department of Justice was the biggest penalty for breaking the Sherman Act, which covers competition law.
The guilty pleas from the banks are seen as highly significant as banks have settled previous investigations without an admission of guilt.
The Attorney General warned that further wrongdoing would taken extremely seriously: “The Department of Justice will not hesitate to file criminal charges for financial institutions that reoffend.
“Banks that cannot or will not clean up their act need to understand – it will be enforced.”
Alibaba will meet with investors next week as it considers issuing its first US bond sale.
The Chinese e-commerce giant has hired Morgan Stanley, Citigroup, Deutsche Bank and JP Morgan to manage the sale.
Alibaba would offer dollar-denominated notes to institutional investors, the company said in a statement.
Alibaba considers issuing first US bond sale
Reports suggest that Alibaba would sell $8 billion in bonds after its record public listing just two months ago.
News of Alibaba’s bond sale comes after it made $9 billion in sales on Singles’ Day in China this week, which is considered the world’s biggest online sales day.
In September, the company’s initial public offering in New York was the biggest in the world, raising $25 billion and its stock is up nearly 70% since then.
Alibaba will hold meetings next week in Boston, New York, Hong Kong, London and Singapore.
Moody’s has given the proposed bond an A1 credit rating.
Citigroup has agreed to pay $7 billion to US authorities to settle an investigation into risky sub-prime mortgages.
Citigroup will pay $4 billion to the Department of Justice and $2.5 billion for “consumer relief”.
Consumer relief includes investment in affordable homes and mortgage relief.
Following the decision, the bank reported a stronger than predicted quarterly profit, and saw its share price rise by 3.62% to $48.70.
Second-quarter earnings fell by 96% to $181 million, but that was after a $3.8 billion charge related to the settlement.
Citigroup has agreed to pay $7 billion to US authorities to settle an investigation into risky sub-prime mortgages
The settlement stems from the sale of securities made up of sub-prime mortgages, which were at the centre of the 2008 financial crisis.
Citigroup is the second major bank to pay a settlement since President Barack Obama launched an investigation into housing loans.
JPMorgan Chase paid $13 billion last year to settle government investigations.
The Citigroup fines are said to have surprised stock analysts and people inside the bank, who had hoped to settle for less.
According to the US Attorney General Eric Holder, “under the terms of this settlement, the bank has admitted to its misdeeds in great detail”.
Eric Holder said the settlement “does not absolve Citigroup or its employees from facing any possible criminal charges in the future”.
Citigroup’s chief executive, Michael L. Corbat, said that the decision was the right one for shareholders.
“We believe that this settlement is in the best interests of our shareholders, and allows us to move forward and to focus on the future, not the past,” he said.
Investors welcomed the decision, as Citigroup’s share price rose in New York trading.
The US Federal Deposit Insurance Corporation (FDIC) has sued 16 banks for allegedly manipulating the London interbank offered rate (LIBOR).
The LIBOR rate is used to set trillions of dollars of financial contracts, including mortgages and financial transactions around the world.
The regulator said the manipulation caused substantial losses to 38 US banks which were shut down during and after the 2008 financial crisis.
The sued banks include Barclays, HSBC, Citigroup and Royal Bank of Scotland.
The British Bankers’ Association (BBA) has also been sued by the FDIC.
“BBA participated in the alleged scheme to protect the revenue stream it generated from selling Libor licenses and to appease the Panel Bank Defendants that were members of the BBA,” it was quoted as saying by the AFP news agency.
The FDIC has sued 16 banks for allegedly manipulating the LIBOR
The FDIC alleged that the banks mentioned in its lawsuit rigged the rate from August 2007 to at least mid-2011.
Other banks named in the lawsuit include Bank of America, JPMorgan Chase, Deutsche Bank, Lloyds Bank, Credit Suisse, UBS, and Rabobank.
LIBOR is the average rate at which banks lend money to one another and is decided on a daily basis.
Most of the world’s biggest banks contribute estimates to form the LIBOR.
But there have been allegations that some have looked to profit from it by understating or overstating their submissions.
Over the past two years, regulators across the globe have been investigating the manipulation of the rate and there have been $3.7 billion in fines to date.
A string of international banks and brokers have faced both criminal and civil penalties for their involvement in the scandal.
Some banks have also been found to have understated their submissions in the period during and after the financial crisis.
Citigroup has agreed to pay $395 million to Freddie Mac to settle claims of potential flaws in mortgages it sold to the firm.
The sum covers nearly 3.7 million loans sold to Freddie Mac between 2000 and 2012.
It is latest in a series of settlements by US banks with agencies Freddie Mac and Fannie Mae – bailed out by the government during the financial crisis.
The two have claimed that banks sold them toxic debts and as a result should be responsible for the losses on them.
“Today’s agreement with Freddie Mac marks another important milestone in successfully resolving Citi’s remaining legacy mortgage issues,” Jane Fraser, chief executive of CitiMortgage, said in a statement.
Tom Fitzgerald, spokesman for Freddie Mac said the agreement was an “equitable one” and “allows both companies to move forward”.
Citigroup has agreed to pay $395 million to Freddie Mac to settle claims of potential flaws in mortgages it sold to the firm
In the run-up to the financial crisis of 2007-08, the US witnessed a big boom in its housing market.
The boom saw banks grouping together home loans and selling them as investments, including to firms such as Freddie Mac and Fannie Mae.
But as the housing market collapsed and financial crisis spread many of the underlying mortgage holders were unable to repay their debts.
As a result, the investments plummeted in value, with disastrous consequences for banks all over the world.
Freddie Mac and Fannie Mae lost more than $30 billion, partly because of their investments in the subprime mortgages, and had to be bailed out by the US government.
Since then, banks have been under pressure to resolve claims on potentially faulty mortgages sold to the two firms.
Citigroup announced a deal in July to pay Fannie Mae $968 million for loans over a similar period.
In January, Bank of America agreed to pay Fannie Mae $11.6 billion to settle claims relating to residential home loans.
Citigroup announces it is cutting 11,000 jobs worldwide in an efficiency drive, with most of the jobs being lost in its consumer banking division.
The bank said the move, which will see its headcount shrink by 4%, would cost it about $1 billion in pre-tax charges.
Shares in the bank rose 7% following the announcement.
The move comes two months after the bank’s former chief executive, Vikram Pandit, suddenly resigned.
Michael Corbat took over from Vikram Pandit as chief executive.
The bank said the $1 billion charge would be recorded in its fourth-quarter figures for this year.
It said it would also add another $100 million in charges to the first half profits for 2013.
Citigroup announces it is cutting 11,000 jobs worldwide in an efficiency drive, with most of the jobs being lost in its consumer banking division
Citigroup said the changes would leave it $900 million better off in 2013 and a further $1.1 billion the following year.
The company said that about 25% of the charges for the fourth quarter related to its securities and banking division, with another 10% in transaction services.
Another third would come from reductions in its global consumer banking division, where 6,200 positions would be cut.
The banking group said it would be selling or scaling back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.
Other countries affected by the changes would be Brazil, Hong Kong, Hungary, South Korea and the US.
It is also closing branches in Greece and Spain, countries hard-hit by the eurozone crisis.
It intends to focus on the 150 cities that have the highest growth potential in consumer banking.
After the changes, Citi said it would have more than 4,000 retail branches around the world.
At the time of Vikram Pandit’s sudden departure, the bank’s chairman, Michael O’Neill, said the departure was not due to any “strategic, regulatory or operating issue”.
Vikram Pandit left the bank with a settlement of more than $15 million.
He resigned a day after Citi reported an 88% drop in quarterly profits to $468 million.
This website has updated its privacy policy in compliance with EU GDPR 2016/679. Please read this to review the updates about which personal data we collect on our site. By continuing to use this site, you are agreeing to our updated policy. AcceptRejectRead More
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
