USB US Bancorp

Regulation

U.S. Bancorp Being Investigated for Ties To Race-Car Driver

U.S. Bancorp disclosed in a securities filing Friday that it is the subject of an investigation into its relationship with indicted race-car driver Scott Tucker.

The bank said the Manhattan U.S. attorney's office is investigating its relationship with Mr. Tucker and has asked for information on aspects of the lender's anti-money-laundering controls.

While U.S. Bank had previously disclosed it was cooperating with an investigation of Mr. Tucker, it hadn't mentioned the scrutiny of its own controls.

In February, Mr. Tucker, a businessman-turned-race-car driver, and his lawyer were charged with overcharging customers hundreds of millions of dollars in undisclosed fees in one of the largest federal criminal payday-lending cases ever. Mr. Tucker had bank accounts with U.S. Bank, the Minneapolis lender has said.

The disclosure adds to anti-money-laundering issues at U.S. Bank. In October, it entered into a consent order with the Office of the Comptroller of the Currency over issues with its controls.

Under anti-money-laundering laws, banks can be penalized for failing to spot suspicious activity running through customer accounts. The size of such penalties have increased drastically in recent years.

--Rachel Louise Ensign

EARNINGS

Allianz Profit Drops

FRANKFURT -- Allianz SE reported a 46% decline in profit for the second quarter on a high disaster bill, a substantial one-time hit from the planned sale of a unit and continuing net asset outflows at Pimco.

The disclosure sent shares in Europe's biggest primary insurer by market value down 4% during the session.

Still, the first-half results put the company on course for its full-year operating profit targets. Allianz, which owns U.S. bond fund-manager Pacific Investment Management Co., targets operating profit between EUR10 billion ($11.1 billion) and EUR11 billion for 2016.

Net profit fell to EUR1.09 billion from EUR2.02 billion in the year-ago period, well shy of an average forecast of EUR1.51 billion in a Dow Jones Newswires poll. Many analysts hadn't factored in a EUR352 million one-time hit from Allianz's planned sale of a unit in South Korea.

--Ulrike Dauer

EUROPEAN BANKING

Cost Cutting at RBS

Royal Bank of Scotland Group PLC will roll out a new cost-cutting plan after recording a first-half net loss of more than GBP2 billion ($2.26 billion) amid ultralow U.K. interest rates and uncertainty over Brexit.

RBS's share price slumped more than 5% during the session Friday as investors digested the weaker-than-expected results.

Chief Executive Ross McEwan said his executive team is working on a new cost-cutting plan that could be presented in the first quarter of next year. Like several other British banks, RBS warned of lower returns after the U.K. voted to leave the European Union.

--Max Colchester

(END) Dow Jones Newswires

August 06, 2016 02:47 ET (06:47 GMT)

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