CURO selling legacy direct lending business; Melvin Capital to close funds

TOP NEWS IN BANKING & FINANCIAL SERVICES

* Consumer finance company CURO Group Holdings Corp. is selling its legacy U.S. direct lending business to Community Choice Financial, a Dublin, Ohio-based consumer financial services company, for $345 million. At the same time, CURO has clinched a deal to acquire First Heritage Credit, an installment consumer lender based in Ridgeland, Miss., for $140 million in cash.

* Melvin Capital Management LP plans to close its funds and return the money to investors following 17 months of "trying time," after suffering big losses in early 2021 from short bets on "meme stocks" involving GameStop Corp., The Wall Street Journal reported, citing a letter to investors. The hedge fund manager's founder, Gabe Plotkin, wrote to investors, "I have given everything I could, but more recently that has not been enough to deliver the returns you should expect." Plotkin said he now recognizes the need to end managing external capital, according to the report.

➤ Stock prices fell for 12 of Banc Funds' top 20 holdings in Q1

The total value of common stock investments at Banc Funds Co. LLC fell 4% to $1.27 billion at March-end, according to the Chicago-based asset manager's most recent Form 13F filing.

➤ Brazil's largest banks post higher Q1 income YOY

Itaú Unibanco Holding SA, Banco do Brasil SA and Banco Bradesco SA all posted higher profits on both a quarterly and a yearly basis in the first quarter, even as their aggregate provisions also rose significantly.

READ MORE about the market reaction and industry impact of the evolving situation in Russia and Ukraine in our new Issue in Focus.

BANKING

* St. Petersburg, Fla.-based BayFirst National Bank, a subsidiary of BayFirst Financial Corp., completed a restructure of its residential mortgage division. The bank discontinued its primary consumer direct residential mortgage business line, closing residential loan production offices in Overland Park, Kan.; New Albany, Ohio; and Tampa, Fla.

FINANCIAL SERVICES

* In its broad inquiry into Wall Street bankers' use of unofficial messaging platforms in their work, the SEC is requesting banks, including Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc., to order staff in key positions to hand over their phones for examination by lawyers, Bloomberg News reported, citing people with direct knowledge of the requests. JPMorgan Chase & Co. was previously hit with $200 million in regulatory fines over the practice, Bloomberg reported.

* Keep Financial, a new fintech company formed by Kabbage Inc. founders Rob Frohwein and Kathryn Petralia, launched the Keep platform with its initial Keep Vesting Cash plans. The new compensation platform aims to help companies attract top talent and increase employee retention, according to a press release.

* Mastercard Inc. is joining Citigroup and other companies to cover travel expenses for employees seeking access to abortions out of their states, Bloomberg News reported, citing a staff memo. The new policy will be effective June 1, according to the report. In April, Citigroup got flak from Republican lawmakers because of the move.

* Goldman Sachs has fewer Black female executives and senior officials on its roster than it did a year ago, its latest annual people strategy report showed. According to the report posted on its website, the Wall Street company had 19 Black female executives or senior officials and managers as of November 2021, down from 25 a year ago. The number of Black male staff at the same level remained the same.

POLICY AND REGULATION

* The U.S. House Committee on Financial Services passed eight bills aimed at keeping up with an evolving financial marketplace and standing up for vulnerable communities. The bills spanned from strengthening cybersecurity for the financial sector to expanding financial access to underserved communities. National Credit Union Administration Chairman Todd Harper in a press release thanked the committee; its chair, Rep. Maxine Waters, D-Calif.; and Rep. Bill Foster, D-Ill., for advancing the bills.

* Sen. Dan Sullivan, R-Alaska, introduced legislation to curb the power of giant investment firms, specifically BlackRock Inc., Vanguard Group Inc. and State Street Corp., over companies on adopting environmental, social and governance policies.

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