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Daily Dispatches – JPMorgan mulling $11 billion settlement

Mounting financial woes

Mounting financial woes

JPMorgan Chase is preparing to settle all of its outstanding mortgage securities issues for about US$11bn as part of a deal with US state and federal authorities, according to the Financial Times.

The settlement comprises US$7 billion cash and US$4 billion of mortgage relief for struggling homeowners as penalties for allegations that the bank packed mortgage-backed securities with faulty home loans in the run-up to the crisis.

 If finalised, the settlement would surpass a US$4.5 billion settlement paid by BP to resolve criminal charges over the Gulf of Mexico oil disaster. JPMorgan has already paid US$5.3 billion to settle allegations from US regulators and states that it used flawed processes to seize the homes of delinquent borrowers, and its legal costs since the crisis are well into eight figures.

Alibaba has abandoned plans for a $60bn-plus listing in Hong Kong and is pursuing a US share sale after the city’s exchange refused to allow the company to hand-pick most of its board members, according to a Financial Times report.

China’s biggest e-commerce company had been planning to sell shares in Hong Kong for several months, but ended talks with the exchange earlier this week.

Founder Jack Ma and other top executives, who together own a little more than 10% of Alibaba, had been trying to persuade Hong Kong authorities that leading executives should be allowed to nominate a majority of board directors.

Shanghai free-trade zone boosts property 

A leading indicator of the growing interest in Shanghai’s free-trade zone is evident in the robust escalation in and demand for property near the zone. Bloomberg says home prices near an area that Shanghai has designated as a free-trade zone have surged 30% amid expectations the development will boost housing values.

The 29-square-kilometer (11-square-mile) proposed free-trade zone in China’s financial centre may allow freer yuan convertibility, liberalise interest rates and relax restrictions on foreign investment as part of Premier Li Keqiang’s drive to sustain growth by shifting the economy toward services and consumption from investment and exports. The zone may be opened officially by the end of the month.

Genworth Aussie IPO slated for 2014

Genworth Financial which delayed an initial public offering of its Australia mortgage guarantor in 2012 says the IPO will probably come in 2014 rather than this year.

There is “more likelihood maybe we push it into 2014, versus now” Chief Executive Officer Tom McInerney said, adding that, “I think there will be regulatory uncertainty into 2014.”

BMO plans to hire Hong Kong investment team

AsianInvestor reports that Canadian group BMO Global Asset Management plans to hire sales people and beef up its distribution to sell its HK-domiciled funds into the mainland.


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