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<ul class="summary-list"><li>Goldman Sachs reported third-quarter earnings on Tuesday that beat analysts' expectations.</li><li>The investment bank posted $12.7 billion of revenue and almost $3 billion of net earnings.</li></ul>Goldman Sachs reported third-quarter earnings on Tuesday that beat Wall Street's expectations, sending its stock up as much as 3% in premarket trading.The investment bank generated $12.7 billion of net revenue, a 7% increase from the same period last year. It also cut its operating expenses by 8%, fueling a 45% surge in net income to $2.99 billion. Earnings per share were $8.40, exceeding Alphasense's consensus estimate of $6.71.Net revenues rose 7% year over year in the global banking and market division, fueled by a 20% surge in investment banking fees to $1.9 billion. The fee jump reflected a sharp increase in net revenues from debt underwriting amid strong leveraged finance and investment-grade activity, and higher net revenues in equity underwriting driven by secondary offerings.The asset and wealth management segment saw a 16% rise in net revenues as it collected record quarterly management and other fees. Moreover, assets under supervision grew by $169 billion last quarter to a record $3.1 trillion.CEO David Solomon said in the earnings release: "Our performance demonstrates the strength of our world-class franchise in an improving operating environment. We continue to lean into our strengths – exceptional talent, execution capabilities and risk management expertise – allowing us to effectively serve our clients against a complex backdrop and deliver for shareholders."He had struck a cautious tone at a Barclays conference in September, per a transcript provided by AlphaSense, warning that Goldman's trading unit was trending 10% lower than a year earlier largely due to fixed-income weakness.Solomon had also warned of a roughly $400 million blow to pre-tax earnings from the bank shifting away from its credit card partnership with General Motors and selling its seller financing loans.Meanwhile, Bank of America's third-quarter earnings showed its revenues were almost flat year on year at $25.3 billion. Higher non-interest expenses pushed its net income down 12% to $6.9 billion.CEO Brian Moynihan said it was another good quarter with "solid earnings results, delivering higher average loans and our fifth consecutive quarter of sequential average deposit growth."Bank of America stock was up 1.7% in premarket trading at the time of publication.

Goldman Sachs beats Wall Street forecasts as investment-banking fees surge 20%

<ul class="summary-list"><li>Major banks like Goldman Sachs walloped Wall Street expectations thanks to dealmaking fees.</li><li>Investment banking has made a comeback, and bigger bonuses are in the cards, too.</li></ul>Christmas came early for investment bankers.The biggest banks on Wall Street reported a huge boost in dealmaking fees this quarter after a two-year slump. Investment bank revenue surged 30% on average at <a target="_blank" href="https://www.businessinsider.com/goldman-sachs-3q-results-dealmaking-trading-resurgence-david-solomon-2024-10">Goldman Sachs</a>, JPMorgan, Bank of America, Citigroup, and Morgan Stanley, according to Wells Fargo analyst Mike Mayo."We continue to believe we are in the early stages of a multiyear capital markets recovery," Morgan Stanley CFO Sharon Yeshaya said during an earnings call. Morgan Stanley's investment bank revenue surged 56% year over year to $1.46 billion, beating Wall Street expectations.Several tailwinds are at play, including tempering inflation and pent-up demand. Debt underwriting has surged as companies rushed to take advantage of <a target="_blank" href="https://www.businessinsider.com/fed-cuts-interest-rates-how-much-september-fomc-powell-inflation-2024-9">interest rate cuts</a>, S&amp;P Global's Nathan Stovall told BI. After years of recession fears, there is more optimism the Federal Reserve can deliver a <a target="_blank" href="https://www.businessinsider.com/inflation-recession-outlook-prediction-labor-market-job-additions-interest-rates-2024-10">soft landing</a>, he said."You're seeing corporates get more comfortable with the world they're operating in, and they're willing to take more risks, and this leads to more M&amp;A activity, more equity raising, things like that," said Stovall, director of financial institutions research.An incoming flurry of dealmaking could reflect a broader economic recovery, as lower borrowing costs make it easier for companies to fund acquisitions. This past quarter saw several <a target="_blank" href="https://www.businessinsider.com/megamergers-deals-m-a-wall-street-comeback-2024-9">megamergers</a>, such as candy giant Mars buying the maker of Pringles for <a target="_blank" href="https://www.businessinsider.com/mars-buying-pringles-cheez-it-maker-kellanova-36-billion-deal-2024-8">nearly $36 billion</a>. Citi advised Mars and provided $29 billion in debt financing with JPMorgan. Paramount <a target="_blank" href="https://www.businessinsider.com/paramount-global-agrees-to-merge-with-skydance-shari-redstone-2024-7">agreed to merge</a> with David Ellison's Skydance Media. Bank of America is one of Skydance's advisors on the $8 billion deal.Wall Street CEOs, however, are cautious about their enormous wins. <a target="_blank" href="https://www.businessinsider.com/jpmorgan-earnings-q3-jamie-dimon-economy-geopolitics-banking-wall-street-2024-10">JPMorgan's Jamie Dimon </a>warned on an earnings call that the favorable interest rate conditions "may not prevail or be the ongoing conditions late next year" and of geopolitical turmoil that is "treacherous and getting worse." Goldman Sachs CEO David Solomon noted that while the bank had a healthy backlog, M&amp;A and equity activity is still well below 10-year averages.Risks to this comeback loom large, Mayo wrote in a research note."There's little question to us that activity and revenues reflect a degree of bull market banking," he wrote. "This could end based on potential results and reactions to the upcoming November elections, a stock market decline, and/or unexpected changes in rates (esp. higher)."Portfolio manager Cole Smead described the results as a "head fake." Smead is watching the US's ballooning deficit, concerned it could <a target="_blank" href="https://www.businessinsider.com/fixed-income-investing-tips-national-debt-yield-curve-steepening-treasury-2024-9">push up bond yields</a> and the cost of borrowing, which would discourage dealmaking."This can go on for maybe a quarter or two more, but it is likely going to fall apart long before it ever gets back to anywhere near the numbers of 2021," said the CEO of Smead Capital Management, which owns shares of Bank of America and JPMorgan. "Ultimately, this equity market, with many risks out there, is complacent and doesn't care. The problem is when the chickens come home to roost, this activity will go back to low levels again."<h2 id="d7f46fb6-2aae-4454-a462-5b0acb5aa3e8">The potential 'X-factor'</h2>While the risks are real, this quarter's upswing isn't necessarily a blip. For the five banks, Mayo estimated that capital markets revenue will grow 8% in 2025 to $31.7 billion and another 7% to $34 billion in 2026.There's also what Mayo calls "the X-factor": the $1 trillion-plus of dry powder held by private equity firms.Jon Gray, president and chief operating officer of private equity giant Blackstone, said that anecdotally, the number of confidentiality agreements more than doubled in September compared with a year ago."Now, that doesn't necessarily mean it's going to turn into that volume of deals. But it clearly shows you there is more enthusiasm," Gray said during the firm's earnings call Thursday. "And we know in the private equity world, there's a lot of companies that need to be sold, similar story in real estate."Finance professor David Stowell told BI that while the upcoming US election and overseas conflict pose economic risks, the sponsors can't sit on the sidelines indefinitely."They know that they always have to risk-adjust their investments," said Stowell, an investment banker for two decades before joining the Kellogg School of Management at Northwestern University. "They pretty much have to spend the money, or their kind of business goes away."Stovall acknowledged that one quarter doesn't make a trend but said that economic data, such as job creation numbers, points to a <a target="_blank" href="https://www.businessinsider.com/us-economy-outlook-data-points-to-soft-landing-no-recession-2024-9">soft landing</a>. This bodes well for dealmaking for the rest of the year and 2025."I'm cautiously optimistic," he said. "It is wise to not jump up and down and say things are going to go straight up from here, but I do think it's more encouraging than it's been for a while."For now, some Wall Streeters can already count on larger bonuses, according to compensation consultant Alan Johnson. With debt and equity capital markets thriving, underwriters will get the biggest gains. For debt and equity underwriters, he estimated bonus increases of 25% to 35% and 20% to 30%, respectively. M&amp;A bankers will have to wait longer for a significant boost and should expect maybe a 5% or 10% uptick this season."Traditionally, the sexiest area would be M&amp;A — the pipeline looks really good, but most of the closing fees would be for 2025," said the founder of Johnson Associates. "The headlines around M&amp;A are really going to be next year's story."

Investment banking has made a multibillion-dollar rebound, but it's too early to pop the Champagne 

The State Bank of India (<keyword id="19898108" type="General" weightage="20" keywordseo="sbi" source="keywords">SBI</keyword>) in its latest report has asked for <keyword id="20213295" type="General" weightage="20" keywordseo="tax-reforms" source="keywords">tax reforms</keyword> after concerns were flagged over the recent decline in <keyword id="20202062" type="General" weightage="100" keywordseo="bank-deposits" source="keywords">bank deposits</keyword>. The report says tax Reforms for Deposits can accentuate the banking system's stability and resilience to the next level. SBI attributed the fall in deposits to the varied rates of return offered by different <keyword id="20139443" type="General" weightage="20" keywordseo="investment-options" source="keywords">investment options</keyword> for similar time frames and different tax rates on <keyword id="22837794" type="General" weightage="20" keywordseo="returns-on-deposits" source="keywords">returns on deposits</keyword>. The <keyword id="20352499" type="General" weightage="20" keywordseo="SBI-report" source="keywords">SBI report</keyword> said that "<keyword id="20658792" type="General" weightage="20" keywordseo="tax-treatment" source="keywords">Tax treatment</keyword> of bank and non-bank channels are non-uniform, even as bank deposits have a wider and denser pass-through effect across the populace sensitivity of Deposits on Tax is as much as 7 per cent" The report noted that a bank deposit of Rs 10 lac in a Savings Bank (SB) account at an investment return of 3 per cent would generate Rs 30,000 in returns and after accounting for taxes and exemptions, the <keyword id="22837795" type="General" weightage="20" keywordseo="net-return" source="keywords">net return</keyword> would be Rs 16,000. The report adds that the net returns vary significantly if deposits are made in different instruments like <keyword id="21041176" type="General" weightage="20" keywordseo="term-deposits" source="keywords">term deposits</keyword>, short and long-term investments in debt funds, liquid funds or bonds. The tax rates on these deposits also favour saving banks or term deposits. The report illustrates a term deposit of up to one year with the same principal amount of Rs 10 lac at a yield of 6.25 per cent would result in a net return of Rs 50,000 after taxes. But for term deposits exceeding one year the interest rate is higher and with an interest rate of 7.25 per cent, the gross return would be Rs 72,500. After taxes, the net return would be Rs 58,000. The data highlights that similar type of investments for the same period generates significantly different returns because of different tax treatment by the government. Similar variations are observed in other <keyword id="20105084" type="General" weightage="20" keywordseo="investment-plans" source="keywords">investment plans</keyword> as well. For instance, investments in equity and mutual funds with a 2 per cent dividend income of Rs 10,00,000 generate Rs 20,000, which after taxes the net return is Rs 16,000. However, Short-term investments of less than one year in equity and mutual funds, offering an 11 per cent return generate Rs 1,10,000, with a net return of Rs 88,000 after taxes. This investment if made in Long-term investments of more than one year the return increases to 15% on Rs 10,00,000 and generates Rs 1,50,000 annually. With a lower tax bracket of 12.5 per cent tax on long-term investments and applicable exemptions, the net return is Rs 1,43,750. These variations in returns across different deposits and investment options highlight the complexity and thus investors are choosing the higher return options over the bank deposits which in turn poses a threat to the deposit growth in the banking sector.

Decline in bank deposits because of non-uniform tax treatment on various investment options: SBI report

<ul class="summary-list"><li><keyword id="20475039" type="General" weightage="20" keywordseo="Tyson-Foods" source="keywords" meta.keywordsubtype="org" meta.entityname="Tyson Foods" meta.hostid="261" meta.entityid="Tyson Foods">Tyson Foods</keyword>' former CFO <keyword id="23150648" type="General" weightage="20" keywordseo="John-Randal-Tyson" source="keywords">John Randal Tyson</keyword> will not return to his position after a DWI charge.</li><li>Tyson who is an heir to the founder, was suspended following a DWI charge in June.</li></ul>Tyson Foods' chief financial officer is out of his job — but not out of the company. John Randal Tyson, an heir of founder John W. Tyson, was suspended from the company after being arrested on charges of driving while intoxicated in June. That marked <a target="_blank" class="" href="https://www.businessinsider.com/tyson-foods-cfo-embarrassed-sorry-after-arrest-wrong-home-bed-2022-11">his second alcohol-related arrest since his CFO appointment in 2022</a>. On Thursday, <a href="https://www.businessinsider.com/child-labor-tyson-foods-perdue-farms-chicken-investigation-2023-9" target="_blank">the meat juggernaut</a> announced that its longtime staffer Curt Calaway, who was the interim CFO, would take over. Tyson will stay on as an employee but will be on <keyword id="23150653" type="General" weightage="20" keywordseo="health-related-leave" source="keywords">health-related leave</keyword>, the food company said in a release. Tyson was appointed to the role in 2022 at age 32, making <a target="_blank" class="" href="https://www.businessinsider.com/tyson-foods-cfo-embarrassed-sorry-after-arrest-wrong-home-bed-2022-11">him the youngest CFO of any Fortune 500 company</a> at the time. The <a target="_blank" class="" href="https://www.businessinsider.com/who-owns-tyson-foods-history-2023-5">fourth-generation Tyson family member </a>became CFO three years after he joined the company. He previously worked in <keyword id="19939232" type="General" weightage="20" keywordseo="investment-banking" source="keywords">investment banking</keyword> at <keyword id="19967624" type="General" weightage="20" keywordseo="JPMorgan" source="keywords" meta.keywordsubtype="org" meta.entityname="JPMorgan" meta.hostid="261" meta.entityid="JPMorgan">JPMorgan</keyword> and graduated from Harvard and Stanford. Tyson Foods did not immediately respond to Business Insider's request for comment sent outside regular business hours. The company, known for its Hillshire and Sara Lee brands, is worth $23 billion, and the Tysons are worth $3.1 billion, per Forbes. <h2>Two arrests in recent years</h2>During the first incident in 2022, Tyson was found intoxicated and asleep in a stranger's bed around 2am, <a target="_blank" class="" href="https://www.businessinsider.com/tyson-foods-cfo-embarrassed-sorry-after-arrest-wrong-home-bed-2022-11">Business Insider previously reported.</a> The home where Tyson was found belonged to a woman who said she thought Tyson came through her unlocked front door. He was released later that evening after being charged with public intoxication and criminal trespass. In June, Tyson was charged with driving while intoxicated and careless driving after he misjudged a turn and rode up onto a curb. The scion's run-ins with the law are not the company's only <a target="_blank" class="" href="https://www.businessinsider.com/child-labor-tyson-foods-perdue-farms-chicken-investigation-2023-9">controversy in recent months</a>. In September 2023, The New York Times Magazine <a target="_blank" href="https://www.nytimes.com/2023/09/18/magazine/child-labor-dangerous-jobs.html">published an investigation</a> that showed children as young as 14 were knowingly employed as overnight cleaning staff at plants run by companies including Tyson Foods. Some were gravely injured on jobs that federal law prohibits children from doing. Tyson Foods did not respond to a request for comment from BI at the time. The Department of Labor subsequently investigated child labor at Tyson and Perdue Farms as part of a broader probe. No charges have been filed. In November, <a target="_blank" class="" href="https://www.businessinsider.com/tyson-recalls-frozen-chicken-nuggets-customers-find-metal-pieces-2023-11">Tyson Foods recalled</a> almost 30,000 pounds of its frozen dinosaur-shaped chicken nuggets after complaints that the nuggets contained small metal pieces, the US Department of Agriculture's Food Safety and Inspection Service <a target="_blank" href="https://www.fsis.usda.gov/recalls-alerts/tyson-foods-inc--recalls-chicken-patty-product-due-possible-foreign-matter">said</a>. Correction: August 30, 2024 — An earlier version of this story misspelled the name of Tyson Foods' new CFO. It's Curt Calaway, not <keyword id="23150652" type="General" weightage="20" keywordseo="Curt-Callaway" source="keywords">Curt Callaway</keyword>.

Tyson's finance chief is out of the job. The Tyson heir got the gig at 32, making him the youngest Fortune 500 CFO.

Global <keyword id="19978688" type="General" weightage="100" keywordseo="gold-demand" source="keywords">gold demand</keyword> in Q2 2024, excluding over-the-counter (OTC) transactions declined by 6% year-on-year to 929 tonnes, primarily due to a sharp fall in jewelry consumption, according to the latest report of the <keyword id="20195223" type="General" weightage="20" keywordseo="World-Gold-Council" source="keywords" meta.keywordsubtype="org" meta.entityname="World Gold Council" meta.hostid="261" meta.entityid="World Gold Council">World Gold Council</keyword>. However, when including <keyword id="22654356" type="General" weightage="20" keywordseo="OTC-investment" source="keywords">OTC investment</keyword>, total gold demand increased by 4% YoY to 1,258 tonnes, marking the highest Q2 figure since data collection began in 2000. The record-high <keyword id="19910265" type="General" weightage="20" keywordseo="gold-prices" source="keywords">gold prices</keyword> took a significant toll on jewelry consumption. Volumes fell 19% YoY to 391 tonnes, the lowest in four years. The report reveals a mixed picture for the Indian market in the second quarter of 2024. While overall gold demand showed a modest increase due to investment in OTC markets and central bank purchases, India witnessed trends that reflect broader market shifts. This decline reflects the impact of elevated gold prices on consumer purchasing behaviour, particularly in markets sensitive to price fluctuations, including India. <keyword id="19946830" type="General" weightage="20" keywordseo="central-banks" source="keywords">Central banks</keyword> continued to be significant players in the gold market, with net gold buying increasing by 6% YoY to 184 tonnes. This rise is attributed to the need for portfolio protection and diversification in a volatile economic environment. In June alone, central banks reported net purchases of 12 tonnes, with key contributors including the Central Bank of Uzbekistan and the Reserve Bank of India, both adding 9 tonnes to their reserves. The Monetary Authority of Singapore was noted as the largest seller, offloading 12 tonnes in the same month. The LBMA (PM) gold price averaged a record $ 2,338 per ounce in Q2 2024, up 18% YoY and 13% QoQ. Gold prices peaked at a new high of $2,427 per ounce in May. This environment drove significant investment and production trends, with total gold supply growing by 4% YoY to 1,258 tonnes. Mine production reached a record 929 tonnes for a second quarter, while recycling supply was the highest since 2012, reflecting the response to rising prices. OTC investment was a major component of the Q2 total gold demand, amounting to 329 tonnes. This, along with continued central bank buying, contributed to pushing gold prices to record highs during the quarter. Despite a minor 7-tonne decline in global gold <keyword id="19930506" type="General" weightage="20" keywordseo="etf" source="keywords">ETF</keyword> holdings in Q2, this was an improvement compared to the 21-tonne drop in Q2 2023. The decline in ETF holdings was followed by early outflows and nascent inflows later in the quarter. Retail bar and coin investment experienced a 5% decline to 261 tonnes, mainly due to weakened demand from Western markets. Conversely, gold used in technology saw an 11% YoY increase, driven by the continued growth in <keyword id="19904566" type="General" weightage="20" keywordseo="artificial-intelligence" source="keywords">artificial intelligence</keyword> (AI) applications. <keyword id="21088407" type="General" weightage="20" keywordseo="investment-trends" source="keywords">Investment trends</keyword> continued to diverge regionally. Eastern markets exhibited robust demand for bars, coins, and ETFs, while Western markets saw marked declines. However, Western ETF investment flows have shown signs of recovery in early Q3 2024. Looking ahead to the full year of 2024, it is expected that revived Western investment flows will help balance out weaker consumer demand, and potentially slower central bank buying, compared to 2023.

Global gold demand drops 6% in Q2 2024 due to slump in jewelry consumption, OTC investment pushes the total to record high

<ul class="summary-list"><li>Canaccord Genuity is hiring ex-WPP dealmaker Lance Maerov to work on ad and media M&amp;A.</li><li>Maerov's hiring suggests there could be a coming rise in deals on Madison Avenue.</li></ul>Canadian investment bank Canaccord Genuity is hiring a former top dealmaker at advertising giant <a target="_blank" class="" href="https://www.businessinsider.com/inside-wpps-volatile-year-2023-12">WPP</a> to join its advertising and media mergers and acquisitions practice, Business Insider can exclusively reveal.<a target="_blank" class="" href="https://www.businessinsider.com/top-execs-leading-ad-industry-mergers-aquisitions-2021-8#andrew-scott-chief-operating-officer-wpp-11">Lance Maerov</a>, who left WPP in December, is set to join Canaccord Genuity's technology, media, marketing, and information M&amp;A practice, two people familiar with the matter told BI. The company informed staff earlier this week, one of the people said. They requested anonymity in order to maintain business relationships. Their identities are known to BI.Canaccord Genuity didn't respond to requests for comment.The move to expand the bank's media and advertising practice by hiring a prolific Madison Avenue dealmaker is a strong signal that acquisitions in the agency space could heat up. Recent Canaccord Genuity deals in the ad and media space include the sale of <a target="_blank" class="" href="https://www.marketingdive.com/news/publicis-acquires-mars-united-commerce-full-funnel-marketing/727539/">Mars United Commerce</a> to Publicis Groupe, Verve Group's acquisition of <a target="_blank" class="" href="https://www.adexchanger.com/mobile/verve-acquires-jun-group-a-mobile-video-and-gaming-network-for-185-million/">Jun Group</a>, and <a target="_blank" class="" href="https://www.adexchanger.com/omnichannel-2/cadent-acquires-adtheorent-for-324-million-with-a-plan-for-performance-tv/">AdTheorent</a>'s sale to Novacap-owned Cadent.<h2 id="7487460d-0072-4efb-a442-7c2e88683789">The advertising industry is undergoing radical change that's fueling deal activity</h2>The advertising agency landscape has transformed in recent years amid the advent of digital marketing and the emergence of new technology and practices, from <a target="_blank" class="" href="https://www.businessinsider.com/how-ai-changing-advertising-agency-business-2023-9">artificial intelligence</a> to <a target="_blank" class="" href="https://www.businessinsider.com/retail-media-advertising-surges-challenging-google-traditional-channels-2023-9">retail media</a>. Agencies have responded by adapting their services to suit a broader array of client needs than simply creating and buying their ads, as in decades past.It's been marked by a wave of high-profile acquisitions, such as Publicis Groupe's $4.4 billion purchase of the data business <a target="_blank" class="" href="https://www.businessinsider.com/publicis-acquires-epsilon-for-44-billion-but-marketers-say-combining-forces-will-be-a-challenge-2019-4">Epsilon in 2019</a> and, more recently, Omnicom acquiring e-commerce specialist <a target="_blank" class="" href="https://www.thedrum.com/news/2024/01/19/inside-the-omnicom-flywheel-merger-with-john-wren-jonathan-nelson-duncan-painter">Flywheel Digital</a> for $835 million last year.The varying fortunes of different ad-holding companies, as well as an emergence of new entrants — and a growing interest in the space <a target="_blank" class="" href="https://www.businessinsider.com/private-equity-firms-investing-in-advertising-and-marketing-companies-2024-3">from private equity</a> — have also fueled speculation that agency groups, too, could be merged or acquired.Rumors continue to buzz in the industry about what might be <a target="_blank" class="" href="https://www.businessinsider.com/insiders-question-ad-giant-wpp-ceo-mark-reads-bounceback-plan-2023-10">next for WPP</a>, once the leader of the pack, whose market value has dropped well below that of arch-rivals Publicis and Omnicom. (On Wednesday, WPP reported <a target="_blank" class="" href="https://www.wsj.com/business/earnings/wpp-returns-to-growth-beating-expectations-9a85cd15?mod=media_news_article_pos1">a return to revenue growth</a> in its third quarter, which analysts generally hadn't expected.)The Wall Street Journal reported this summer that IPG was in talks to sell R/GA, its digital agency famed for its work on Nike, <a target="_blank" class="" href="https://www.wsj.com/business/media/interpublic-explores-sale-of-prominent-digital-agency-to-consulting-giant-b96f8eed">to Tata Global Consulting</a>. S4 Capital, led by former WPP chief Martin Sorrell, turned down an acquisition offer from <a target="_blank" class="" href="https://www.wsj.com/business/media/he-was-the-ad-industrys-hunter-now-hes-the-prey-65a12b99">rival firm Stagwell</a> earlier this year, The Wall Street Journal first reported.Maerov, who worked under Sorrell at WPP as its EVP of corporate development, was responsible for the company's M&amp;A and venture capital investments. He also worked closely with current CEO Mark Read and chief operating officer Andrew Scott.Maerov worked for WPP for more than 20 years, during which time it made transformative acquisitions, such as the 2007 purchase of digital marketing company <a target="_blank" class="" href="https://techcrunch.com/2007/05/17/wpp-acquires-247-real-media-for-649m/">24/7 Real Media</a> and the 2015 acquisition of <a target="_blank" href="https://www.businessinsider.com/rob-norman-on-why-wpps-groupm-acquired-essence-digital-2015-11">British media agency Essence</a>.Through WPP's investments, Maerov sat on the board of companies including The Weinstein Company, Vice Media, IT firm Globant, and the lifestyle website Refinery29. He would later <a target="_blank" class="" href="https://www.hollywoodreporter.com/business/business-news/weinstein-board-member-lance-maerov-testifies-harvey-weinstein-1272131/">testify</a> against Harvey Weinstein in the trial that ultimately sent the movie mogul to <a target="_blank" class="" href="https://www.businessinsider.com/harvey-weinstein-found-guilty-sexual-assault-rape-in-trial-verdict-2020-2">jail</a>.This year, Maerov branched out on his own, launching Dinmont Ridge, a strategic advice and investment-capital consulting firm.

WPP's former dealmaker is joining investment bank Canaccord Genuity — a sign advertising M&A could heat up

<div type="image" title="Are Indians depositing less money in banks, or more in mutual funds? Turns out, it&amp;#39;s neither of those." msid="113663806" hostid="261" sizebytes="1121785"></div> Over the past few months, there’s been a lot of brouhaha about the lagging pace of <keyword id="20202062" type="General" weightage="20" keywordseo="bank-deposits" source="keywords">bank deposits</keyword> in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialisation of <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> in the country or the rising preference of Indians towards <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian <keyword id="19949641" type="General" weightage="20" keywordseo="equity-markets" source="keywords">equity markets</keyword> through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="261" meta.entityid="RBI">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by Franklin Templeton, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are household deposits really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. <div type="image" title="Yes, household deposits (as % of total deposits) have dipped, but the drop is far from significant" msid="113663882" hostid="261" sizebytes="306706"></div> Also, we can’t forego the fact that the share of Indian households in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and <keyword id="114757" type="General" weightage="20" keywordseo="savings-account" source="Orion">savings account</keyword> deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (Central Board of Direct Taxes) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of Securities Transaction Tax (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell <keyword id="6361918" type="General" weightage="20" keywordseo="equity-mutual-funds" source="Orion">equity mutual funds</keyword>, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by <keyword id="45369" type="General" weightage="20" keywordseo="equities" source="Orion">equities</keyword> can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in <keyword id="19998084" type="General" weightage="100" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the Fed recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next MPC (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day. Do you have insights or personal experience to share on your personal finances or money? Contact us at <a target="_blank" class="c-link" href="mailto:businessinsider@timesinternet.in">businessinsider@timesinternet.in</a>.

Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

New Delhi [India], July 19 (ANI): Households are choosing the <keyword id="20033427" type="General" weightage="20" keywordseo="capital-markets" source="keywords">capital markets</keyword> over the <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword> to park or invest their <keyword id="25450" type="General" weightage="20" keywordseo="savings" source="Orion">savings</keyword>, highlighted <keyword id="64190" type="General" weightage="20" keywordseo="RBI-Governor" source="Orion">RBI Governor</keyword> <keyword id="3083263" type="General" weightage="20" keywordseo="Shaktikant-Das" source="Orion">Shaktikant Das</keyword> during his address at FE Modern BFSI (Banking, Financial Services, and Insurance) Summit 2024 on Friday. Governor Das highlighted that traditionally, banks were the primary choice for households to invest their money. However, there has been a noticeable change in consumer behaviour, with a growing preference for capital markets and other <keyword id="5869841" type="General" weightage="20" keywordseo="financial-intermediaries" source="Orion">financial intermediaries</keyword>. He noted, "Households and consumers who traditionally leaned on banks for parking or investing their savings are increasingly turning to the capital markets and other financial intermediaries." This trend indicates a broader diversification of <keyword id="22469312" type="General" weightage="20" keywordseo="household-investments" source="Orion">household investments</keyword> into <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and other savings tools, moving away from traditional investment tools. The Governor stated, "While bank deposits continue to remain dominant as a percentage of the financial assets owned by the households, their share has been declining, with households increasingly allocating their savings to Mutual Funds, Insurance Funds, and Pension Funds." Governor Das also pointed out that this shift in investment patterns has significant implications for the banking sector. Banks now need to explore alternative methods to bridge the gap between credit and deposits. He added, "On their part, banks have sought to fill the credit-deposit gap by increasing their reliance on other sources like short-term borrowings and certificates of deposit, etc. This increases their sensitivity to interest rate movements and poses challenges to liquidity management." The Governor further elaborated on the implications of the shift from CASA (Current Account Saving Account) deposits, stressing that banks must remain vigilant and adaptive. He stated that banks need to continuously focus on improving and refining their credit underwriting standards and the pricing of risks to maintain stability and profitability. Reflecting on recent global banking events, Governor Das drew attention to the banking crises in the US and Switzerland in 2023, which highlighted the risks and vulnerabilities inherent in certain business models. He emphasized the importance of learning from these crises to enhance the resilience of the banking sector. "The banking crisis in the US and Switzerland in 2023 has again brought into focus the risks to banking stability from certain business models and their inherent vulnerability," he added.

Household savings are choosing mutual funds over banks to invest savings: RBI Governor

New Delhi [India], July 12 (ANI): <keyword id="20043730" type="General" weightage="20" keywordseo="Jio-Financial-Services" source="keywords" meta.keywordsubtype="org" meta.entityname="Jio Financial Services" meta.hostid="261" meta.entityid="Jio Financial Services">Jio Financial Services</keyword> has received the nod from the <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) to convert into a <keyword id="20871282" type="General" weightage="20" keywordseo="Core-Investment-Company" source="keywords">Core Investment Company</keyword> (CIC) from a Non-Banking Financial Company (<keyword id="19938496" type="General" weightage="20" keywordseo="NBFC" source="keywords">NBFC</keyword>). The company in an official statement on Thursday stated that "Further to the disclosure dated November 21, 2023, the Company has today received from the Reserve Bank of India approval for conversion of the Company from Non-Banking Financial Company to Core <keyword id="19895437" type="General" weightage="20" keywordseo="investment" source="keywords">Investment</keyword> Company." According to the Reserve Bank of India, a CIC is a specialised NBFC with an minimum asset size of Rs 100 crore. The RBI's circular dated December 20, 2016 stated that, a CIC's main business is the acquisition of shares and securities with certain conditions. One of the conditions stipulated by the central bank is that the CIC holds not less than 90 percent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies. The transition from an NBFC to a CIC involves several key changes in the company's operational framework. As a Core Investment Company, <keyword id="2003276" type="General" weightage="20" keywordseo="Jio" source="Orion">Jio</keyword> Financial Services will primarily focus on investments in and the management of its subsidiaries companies. The transformation to a CIC structure would enable Jio Financial Services to delineate the financials and operations of each subsidiary, to provide better value discovery for investors. Unlike typical NBFCs, CICs are non-deposit taking financial companies that have their assets predominantly invested in the equity shares, preference shares, or debt instruments of their group companies. As a CIC, the company gains greater operational flexibility. It can now focus on core investment activities without engaging in other financial services. The CICs can explore different sectors and diversify their investment portfolio. This flexibility allows them to adapt to changing market conditions. The shares of the company also surged more than 1.5 per cent during the opening session on Friday, and stands at Rs 353.25 at the time of filing this report. (ANI)

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