—— White House Proposes Stricter Bank Oversight; Wall Street Bonuses Drop 26%; JD Subsidiaries File for IPOs; Nestlé Eyes Indian Food Giant; U.S. Housing Market Faces Peak-Season Strains; Apollo Considers Aluminum Bid; H&M Posts Surprise Profit
1. White House Proposes Stricter Bank Oversight
Today, the White House and the Treasury Department proposed to federal banking regulators that they enhance oversight of mid-sized banks with assets between $100 billion and $250 billion—a category that includes Silicon Valley Bank.
The proposals include:
- Changing stress tests from once every two years to annual tests;
- Reducing the time between stress tests once a bank’s assets exceed $100 billion;
- Upgrading supervisory tools to ensure banks can withstand interest rate hikes.
A White House spokesperson emphasized that final decisions lie with banking regulators.
The White House wants the FDIC to replenish recent crisis-related payouts, without relying on smaller local banks.
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2. Wall Street Bonuses Drop 26%
According to New York State Comptroller Thomas DiNapoli, total Wall Street bonuses shrank 21% year-over-year in 2022 to $33.7 billion. The average bonus for securities industry employees in New York fell to $176,000—the lowest since 2019.
DiNapoli noted that shrinking bonuses also impact New York City and State tax revenues, though the state’s recovery is not entirely reliant on Wall Street. Jobs in travel, retail, dining, and real estate development are also crucial.
He added that Wall Street’s push to bring employees back to the office could help revive public transit, as about 43% of finance workers commute via subway.
Just a year ago, Wall Street was aggressively competing for talent with record-breaking benefits and bonuses.
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3. JD Subsidiaries File for IPOs
JD.com’s subsidiaries Jingdong Property Inc. and Jingdong Industrials Inc. have filed for IPOs with the Hong Kong Stock Exchange, though they did not disclose funding targets or valuations.
Post-listing, JD will retain over 50% ownership in both companies.
The news drove JD’s U.S.-listed ADRs up 8.6%—its biggest one-day gain since January.
Jingdong Property, which began independent operations in 2018, has businesses in 29 Chinese provinces and 25 overseas infrastructure projects. It also manages over 20 million square feet of industrial park space.
Jingdong Industrials primarily provides industrial products and tech services, supplying 16,000 construction projects in 2022.
JD.com’s ADRs surged 8.6% after news of the IPO filings—its biggest jump since January.
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4. Nestlé Eyes Indian Food Giant
Sources reveal that global food giant Nestlé SA is participating in the bidding war to acquire India’s Capital Foods Pvt.
The Swiss company is reportedly prepared to pay over $1 billion for Capital Foods, aiming to expand in India’s fast-growing economy.
Other potential buyers have also shown interest, so Nestlé is not guaranteed to win the deal.
Capital Foods launched its first Indian production site in 1961 and sells nearly the full range of food products, including yogurt and cereals.
Nestlé aims to increase its market footprint in developing economies.
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5. U.S. Housing Market Faces Peak-Season Strains
In February, U.S. home sales rose slightly from January thanks to a small drop in mortgage rates. Still, challenges vary widely across regions.
In Las Vegas and Austin, housing supply is ample but buyers are scarce. In contrast, New York and Boston suburbs face strong demand but limited inventory. San Francisco’s market remains slow, heavily affected by the banking crisis.
Mark Fleming, chief economist at First American Financial, said supply—not rates—is now the housing market’s biggest issue, with many areas still facing severe shortages.
In the month ending March 19, new home listing prices dropped 22% year-over-year—the sharpest decline since the pandemic began.
Redfin reports that most U.S. mortgages were issued early in the pandemic at rates below 4%, so homeowners lack motivation to sell amid today’s higher borrowing costs.
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6. Apollo Considers Aluminum Bid
Sources say private equity giant Apollo Global Management is preparing a bid for equipment and component maker Arconic Corp.
Apollo is expected to offer $27–28 per share in early April. It has completed due diligence including site visits and secured financing from several banks. However, Apollo has not made a final decision and may still withdraw.
Founded in 1888, Arconic produces aluminum sheets and plates for aerospace, automotive, transportation, and industrial clients. The company generated $9 billion in revenue in 2022.
Apollo previously made an offer in February, and other private equity firms are also exploring bids.
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7. H&M Posts Surprise Profit
Fashion giant H&M, the world’s second-largest apparel retailer, reported operating profit of $69.89 million for the quarter ending February, up from $41.26 million a year earlier.
Although the result included a $96 million gain from shares in investment firm Sellpy, it far exceeded analysts’ expectations of a $120 million loss.
H&M CEO Helena Helmersson told the Financial Times that despite challenging retail conditions, operations have improved, and excess inventory is at its lowest in years.
She aims to raise the operating margin to 10% by next year. H&M shares jumped over 16% on the profit news.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.