Wednesday's Headlines: MetLife charging into the reverse-mortgage business -- alone
While other financial institutions are dumping their reverse-mortgage businesses, MetLife has been pouring resources into the sector with the aim of leading the industry. An Investment News story notes that, "The reverse mortgage was the most prominently featured product last week on the web site of MetLife Bank, a unit that the company said may hedge the parent against declines in the main insurance business."
After entering the business in 2008 via its purchase from EverBank Financial, and later First Horizon National, MetLife has climbed from No. 5 to No. 2 in the reverse mortgage business, trailing only Wells Fargo. Headcount at MetLife Bank jumped to 4,985 at the end of March from 3,768 a year earlier, and 85 at the end of 2007.
MetLife explained that reverse mortgages offer a "natural hedge" against a contraction in insurance returns when interest rates decline, since more borrowers refinance mortgages when rates are low.
Jefferies' poor quarterly report serves as proxy for the rest of Wall Street. [Reuters]
Toronto-Dominion Bank continues its aggressive push into the U.S. [DealBook]
Bank of America is weighing the sale of part of its $21 billion interest in China Construction Bank. [Bloomberg]
Virgin Group and the new venture NBNK, both of which are targeting the 600 branches being sold by Lloyds, are also interested in nationalised bank Northern Rock.[NY Times]
The National Credit Union Administration has sued JPMorgan Chase and RBS, alleging mortgage securities related misrepresentations. [Reuters]
RBC is now focused on asset management and capital markets in its U.S. operations. [NY Times]
Analysts worry that in a scurry for corporate borrowers, lenders aren't charging enough to cover the risk they take on.[WSJ]
Chinese lenders like China Construction Bank and Agricultural Bank of China are sagging under the pressures of the U.S. economy and Japanese earthquake. [Reuters]