2025-03-18 10:33

Firms look at charters to expand business, reduce borrowing costs Bank charter can also lend more legitimacy to the business Regulators have previously been slow to approve new charters Applicants cautiously optimistic under Trump administration NEW YORK, March 18 (Reuters) - Financial technology firms and crypto companies are seeking to become state or national banks in a bid to expand their business under the Trump administration that they view as more industry-friendly, according to more than half a dozen industry executives. Firms that had been seeking to expand and gain credibility with customers see an opportunity under U.S. President Donald Trump to get licenses that regulators were previously slow or reluctant to approve. Sign up here. "We have seen a lot more interest. We are working on several applications now," said Alexandra Steinberg Barrage, a partner at law firm Troutman Pepper Locke. "Is it in full swing yet? I don't think so. Our clients are being cautiously optimistic, they're waiting for things to settle," as the administration installs heads of banking agencies. Discussions and preparations for bank charters have increased significantly, according to two other sources who are working on potential applications. It has yet to be seen how many firms will follow through, they said. While an institution needs to deal with more regulatory checks if it becomes a bank, its cost of capital and doing business can go down in certain instances. A license can also give more legitimacy to the business in the eyes of customers and allow it to increase business and market opportunities. This will also allow firms to reduce their borrowing costs by drawing on deposits, another big advantage, said Carleton Goss, partner at law firm Hunton Andrews Kurth who is working on three such applications. New banks will also boost industry competition and cater to specific customer groups or regions, industry sources and analysts said. The Office of the Comptroller of the Currency has granted approval to fintech firm SmartBiz to acquire a Chicago-based community bank, Centrust Bank, which gives it a national bank charter, it said in an announcement Monday. It is the first bank charter approval for a fintech firm since 2021, and industry experts expect this trend to continue. CHANGE IN ADMINISTRATION The surge in activity comes after the number of new bank charters granted by U.S. regulators plunged since the financial crisis, reaching a low of only four applications being approved in 2023, according to S&P Global. "Online companies know that they will be coming under greater regulatory scrutiny," said Goss. "It makes sense for them to get ahead of the curve, and in turn, get more credibility and capital at a lower cost by applying for a charter." Between 2010 and 2023, an average of only five new bank charter applications were approved annually by regulators, compared with 144 a year between 2000 and 2007, Barrage and other regulatory lawyers wrote in a recent open letter that made suggestions about streamlining the process. Approvals sometimes took years and in some cases were withdrawn by the applicants, the letter said. Applications dropped because low interest rates squeezed profits, reducing the appeal of bank status, while burdensome regulations deterred potential applicants. After the collapse of bank-fintech middleman Synapse Financial Technologies last year, regulators have also proposed strengthening rules for banks working with fintechs. There are expectations that Trump will usher in a deregulatory regime which is more pro-growth for businesses which could pave the way for some more bank charters in the current administration. "We haven't seen a flurry of charter applications since the financial crisis period, but we certainly saw more in the first Trump administration," said Nathan Stovall, director of the financial institutions research at S&P Global Market Intelligence. Trump's newly-installed regulators have indicated that they are focused on innovation and technology, sending positive signals to fintechs, Stovall added. The administration "is encouraging regulators to adjust risk appetite and take a more pro-growth line," said Nigel Moden, global banking and capital markets leader at EY. "That could lead to an opening up of the market to some more competition." Earlier, the Federal Deposit Insurance Corporation's (FDIC) acting chair Travis Hill said the agency would encourage more firms to pursue bank charters in the coming months to ensure a healthy pipeline of new entrants in the sector. Federal Reserve Governor Michelle Bowman, who has been nominated by Trump as vice chair for supervision, has emphasized the need for speedier , opens new tab approval for new banks. CHALLENGES Industry experts believe that the high scrutiny on granting bank charters is a necessary step for financial stability, but they believe the turnaround process for these applications could be faster. Typically, between $20 million and $50 million is required to set up a new bank, two legal sources said. Access to capital and complying with anti-money laundering laws and the Bank Secrecy Act are some of the biggest challenges for firms applying for charters. Both sources declined to be identified because the discussions are private. "There are still rigorous licensing processes in place and so time will tell as to how quickly new applications can move through the system," Moden said, adding that charter-related activity was picking up. The U.S. has more than 4,500 banks. With an expected rebound in mergers and acquisitions among regional lenders, that number is expected to shrink even as some new entrants jump in. https://www.reuters.com/technology/fintechs-crypto-companies-seek-bank-charters-growth-2025-03-18/

2025-03-18 10:09

MUMBAI, March 18 (Reuters) - The Indian rupee jumped to its highest level in over three weeks on Tuesday, boosted by likely dollar inflows and persistent weakness in the greenback, which teetered near a five-month low against major peer currencies. The rupee rose to a peak of 86.54 against the U.S. dollar, its highest since February 21, before closing at 86.57, up over 0.2% on the day. Sign up here. At least three large foreign banks sold dollars, helping lift the rupee, a trader at a mid-sized private bank said. Bids by state-run banks, however, kept a lid on further gains, traders said. The rupee has strengthened for four consecutive sessions and is up about 0.8% so far this month, aided by a broadly weaker greenback, an uptick in exporter dollar sales and modest inflows. India's benchmark equity indexes, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab, rose more than 1% each on Tuesday, powered by financial and metal stocks. Meanwhile, the dollar index eased nearly 0.2% to 103.3 and Asian currencies were largely rangebound. Weak U.S. economic data, coupled with uncertainty about the inflationary impact of President Donald Trump's trade policies have weighed on the dollar in recent weeks. The Federal Reserve's policy decision and interest rate trajectory will be closely watched on Wednesday to gauge its assessment of policy changes under the Trump administration. "We expect the Fed to acknowledge that downside risks to growth have increased at tomorrow’s FOMC meeting although not sufficiently to encourage the Fed to consider cutting rates again at the current juncture," MUFG Bank said in a note. While the U.S. economic data calendar is relatively light on Tuesday, the focus will be on any developments from a phone call between Trump and Russian President Vladimir Putin about ending the war in Ukraine. https://www.reuters.com/markets/currencies/rupee-leaps-over-three-week-high-inflows-softer-dollar-2025-03-18/

2025-03-18 10:00

March 18 (Reuters) - Sterling hit a fresh 4-1/2-month high at $1.30 against the dollar on Tuesday on rising expectations the Bank of England will not cut interest rates later in the week, while the pound dropped against the euro, which was buoyed by Germany's spending plans. The pound continued to be driven by developments in Europe and the United States. Germany was about to vote on a massive state borrowing programme to fund infrastructure and military spending, while the U.S. threat of tariffs has increased uncertainty about the global economic outlook. Sign up here. The euro hit fresh highs against the dollar and the yen on Tuesday, ahead of the possible approval of the fiscal stimulus in Germany which could boost euro area's growth. The pound was flat at $1.2992 , after hitting $1.3005, its highest level since November 7. The BoE will likely stick to its mantra of only gradual moves ahead as it grapples with the fallout from U.S. President Donald Trump's trade war and mixed news on Britain's economy. "We don't rule out a faster pace (of the BoE easing path) though that would require more obvious and abrupt signs of weakening in the jobs market," said James Smith, developed markets economist UK, at ING, after flagging likely rate cuts in May, August and November. Money markets priced in 54 bps of BoE easing moves in 2025 and an 89% chance of no change in rates this week. IRPR "We doubt the government's Spring Statement on March 26, where some spending cuts are widely expected, will dramatically change the story for the Bank," Smith said. The Organisation for Economic Cooperation and Development (OECD) lowered its forecast for British growth this year to 1.4% from its December forecast of 1.7% ahead of the budget update. British finance minister Rachel Reeves' headroom for meeting her budget rules has probably turned into a 4.4 billion-pound ($5.7 billion) deficit, requiring tough measures next week to get her back on track, a think tank said on Monday. Versus the euro, the pound was down 0.15% at 84.19 pence , having weakened sharply from around 82 pence per euro in early March, on the back of Germany's massive spending plans. https://www.reuters.com/markets/currencies/sterling-briefly-gains-130-against-dollar-boe-focus-2025-03-18/

2025-03-18 08:05

SEOUL, March 18 (Reuters) - Most of the Bank of Korea's board members assessed Asia's fourth largest economy was losing steam faster than expected due to sluggish domestic spending and uncertainties from U.S. tariff policies, minutes from its previous meeting showed on Tuesday. The BOK cut interest rates by 25 basis points (KROCRT=ECI) , opens new tab to 2.75% and significantly lowered its GDP forecasts on February 25, taking the economy from a restrictive monetary policy stance towards a neutral one to support growth. Sign up here. "Domestic economy is getting more sluggish than we had expected earlier and downside risks is growing from U.S. tariff policies," one of the seven board members who voted to cut rates in February, said, according to the minutes. Another one who also voted to cut rates said "consumption is slowing due to deteriorating sentiment from uncertainties at home and abroad, while exports growth is slowing, resulting in overall easing of economic growth." South Korea's economy grew a meagre 0.1% in the fourth quarter of last year. The BOK now expects economic growth of 1.5% for this year, below an earlier 1.9% forecast. https://www.reuters.com/markets/asia/bank-korea-board-wary-faster-loss-economic-momentum-minutes-show-2025-03-18/

2025-03-18 07:49

March 18 (Reuters) - Indian steel prices will face pressure in the upcoming fiscal year as local mills grapple with cheaper imports from China and rising risks from aggressive tariff policies, Fitch Ratings said on Tuesday. The agency reduced its headroom for ratings upgrades for India's top steelmakers by market cap - JSW Steel (JSTL.NS) , opens new tab, currently rated "BB" with stable outlook, and Tata Steel (TISC.NS) , opens new tab, which it rates "BBB-" with a negative outlook. Sign up here. Steelmakers in China, the world's largest producer of the alloy, have been grappling with generating profits as a prolonged property downturn has hit consumption, leading to higher exports to countries such as India. As a result, local mills have been battling a rising influx of discounted steel, with intake from China, South Korea and Japan hitting a record high in the first 10 months of the ongoing fiscal year. Prices dropped to their lowest level in more than three years in August last year. India's fiscal year runs April through March. Meanwhile, U.S. President Donald Trump's 25% tariffs on steel and aluminium imports, which came into effect on March 12, have triggered retaliation from its major trading partners. While the tariffs are expected to have "minimal direct impact" on local steelmakers, the redirection of steel imports from countries with higher exposure to the U.S. into India could pressure domestic prices, the agency said. Japan and South Korea account for 15% of total steel imports to the U.S. Earlier this month, ratings agency S&P Global highlighted similar concerns around the tariffs causing supply redirections. Fitch expects JSW Steel and Tata Steel's margins to improve in the upcoming year, helped by higher domestic demand, lower raw material costs and China's stimulus measures as it would limit imports into India, but said they will remain below average. The lower margins remain a risk for the companies' ratings, with Tata Steel at higher risk from the restructuring in its European operations and from mining taxes imposed by Indian states. https://www.reuters.com/markets/commodities/indian-steel-prices-facing-risk-chinese-imports-tariff-pressures-fitch-says-2025-03-18/

2025-03-18 07:48

ZURICH, March 18 (Reuters) - Energy Infrastructure Partners remains interested in acquiring majority ownership of the renewable energy unit of German agricultural trading group BayWa (BYWGnx.DE) , opens new tab, the Swiss firm said in a letter to investors. BayWa said on Monday it would for the time being retain majority ownership of the renewable energy unit known as BayWa r.e. after an initial agreement with EIP came undone. Sign up here. The Munich-based trader of farming supplies and produce has been grappling with rising borrowing costs, forcing it to embark on a major restructuring drive, including job cuts. In the letter, seen by Reuters, EIP said its plans to raise its stake in BayWa r.e. to a majority holding were paused but not off the table and that it would continue promoting the company's restructuring plans with its current holding. https://www.reuters.com/business/energy/switzerlands-eip-still-eyeing-majority-baywa-renewable-unit-letter-2025-03-18/