Over the last five trading days, major banks rallied on positive domestic economic growth data, aided by strong consumer spending. Gross domestic product climbed at a 2.1% annualized rate. Further, the recent rate hike is anticipated to stabilize the banks’ top-line results.

Mortgage rates declined this week, hitting 4.14%. Despite this fall, investors are apprehensive about parking funds in the housing market, thanks to the volatility in the financial world. However, homeowners seeking lower rates for refinancing are definitely big-time gainers.

Meanwhile, in this era of digitalization, banks are focused on cardless technology, in a bid to help customers use ATMs without physical debit cards. Moreover, strategies to enhance profitability through streamlining operations, and resolution of litigations and probes related to legacy matters and business misconducts persisted in the last five trading days.

(Read: Bank Stock Roundup for the week ending Mar 3, 2017)

Important Developments of the Week

1. Banking giant, Wells Fargo & Company (WFC Quick QuoteWFC - Free Report) officially initiated cardless technology at 13,000 ATMs. The new technology will enable customers to use ATMs without physical debit cards. Notably, customers need to log into their Wells Fargo mobile app which will provide an eight-digit code usable at all the company’s ATMs around the country. With this, the debit or ATM card Personal Identification Number (PIN) will enable customers to access the ATM.

Furthermore, Wells Fargo plans to initiate near-field communication or “NFC” technology at its ATMs, later in 2017. This will enable customers to carry out their ATM transactions through smartphone-generated PIN codes. Notably, ATM users will be required to log in to their respective mobile wallets and then tap their smart phones to the machine’s NFC point in order to confirm the transaction. Notably, over 40% of the bank’s ATMs have this capability presently (read more: Wells Fargo Unveils Cardless ATMs to Boost Digitalization).

2. In order to conduct business again in Saudi Arabia, Citigroup Inc. (C Quick QuoteC - Free Report) has applied for a banking license with the Capital Market Authority (CMA). The move comes as scope for investment is opening up in the nation. Particularly, the government of Saudi Arabia has been taking steps to revive its domestic economy, making efforts to broaden the horizon and diversify the economy away from oil, under its National Transformation Plan.

In order to focus on countries where it could have majority stake, the company sold its interest in Samba Financial Group to Saudi Arabia’s Public Investment Fund for $760 million. This made the company lose its key banking license for the region.

However, Saudi Arabia is not the only nation where Citigroup plans to expand. In fact, after completing 50 years of service in South Korea, the company plans to double its wealth management assets to around $6 billion by 2020 in the country. It seeks to set up new offices and invest in digital technology in order to attract new customers (read more: Citi Plans to Return to Saudi Arabia, Applies for License).

3. Wells Fargo has agreed to pay $110 million to resolve a lawsuit filed against it by customers in May 2015. The class-action suit is related to the bank’s practice of opening more than 2 million credit and deposit accounts for its customers without their permission since 2009.

Wells Fargo expects this payment to settle claims in 11 other pending suits, including 10 in the San Francisco federal court. Notably, the settlement is yet to be approved by the court. If approved, the company will have to repay the fee that its employees charged from customers for the fake accounts which they opened (read more: Wells Fargo to Settle Fake Account Opening Lawsuit for $110M).

Price Performance

Here is how the seven major stocks performed:
 

In the last five trading sessions, Citigroup and Capital One Financial Corp. (COF Quick QuoteCOF - Free Report) were the major gainers, with their shares increasing 4.2% and 4.0%, respectively. Moreover, Bank of America Corp’s (BAC Quick QuoteBAC - Free Report) shares climbed 3.2%.

BofA and The PNC Financial Services Group, Inc. (PNC Quick QuotePNC - Free Report) were the best performers in the last six months, with their shares surging a whopping 52.5% and 34.9%, respectively. Moreover, JPMorgan Chase & Co.’s (JPM Quick QuoteJPM - Free Report) shares jumped 33.7%.

What’s Next?

In the coming five days, nothing major is likely to occur in the banking space. Unless there is a substantial upheaval in the global markets, bank stocks will continue to perform in a similar fashion.

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