Magazine article American Banker

Morning Scan: Netflix's EMV Complaint; 'Waiting for Godot,' I.E., the Fed

Magazine article American Banker

Morning Scan: Netflix's EMV Complaint; 'Waiting for Godot,' I.E., the Fed

Article excerpt

Byline: Andy Peters

Wall Street Journal

Netflix blamed the shift to EMV credit and debit cards for its 10.2% year-over-year decline in U.S. subscribers. Card firms are having none of that talk. One unnamed card industry executive said Netflix is the only subscription-based business complaining about such a problem, so the problem must be Netflix.

Some merchants have participated in programs offered by MasterCard and Visa to automatically update expiration dates and account numbers. Netflix is sticking to its claim that EMV is causing its problems. Netflix said about half of its users must update billing information when their cards are upgraded.

Citigroup avoided big mistakes in the third quarter, beat profit estimates and emerged relatively unscathed in its international businesses. But Citi is still destroying shareholder value, says the "Heard on the Street" team. Citigroup isn't earning its cost of capital. Its return on equity declined to 8% and its return on assets fell to 0.94%.

Financial Times

Strong balance sheets and weak income statements: That's the formula, thus far, for banks' earnings reports for the third quarter. Banks have built fortresses of capital, post-financial crisis. Liquidity worries? Nothing to see here. If only profit was as easy to come by. Retail banking and trading are both lackluster-to-mediocre.

Analysts may be forced to lower profit estimates for the rest of this year and next year. Portales Partners' Charles Peabody said. It's getting to the point where everyone's sick of waiting on the Fed to raise rates. "We've been at this point, expecting rates to go up, for two or three years now," said Oppenheimer analyst Chris Kotowski. "It's like waiting for Godot."

New York Times

First Data raised $2.56 billion from its IPO this week. …

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