Wed, Oct. 7, 7:59 AM| Wed, Oct. 7, 7:59 AM | 5 Comments
Mon, Oct. 5, 3:31 PM
- The Street has priced in earnings declines for pretty much every sector, but Q3 and Q4 estimates for the financials have barely budged, and consensus sees Q3 results 10% above that of a year ago.
- Morgan Stanley's Huw van Steenis, however, sees FICC revenue declines of 10-25% - far more than the 5% or so that's been talked about by bank managements at recent investor conferences - as the commodity price crash combines with collapsing fixed-income trading, and the lack of volatility in forex action.
- With just $20B in FICC revenues, says van Steenis, Q3 is shaping up to be the second worst quarter for banks in the last two years. Leaving his own bank (NYSE:MS) out of the analysis, he sees FICC revenue declines of 17% at JPMorgan (NYSE:JPM), 9% at Goldman (NYSE:GS), and 6% at BofA (NYSE:BAC) and Citi (NYSE:C).
- Bottom line: "On EPS, we are 4% below consensus on average across our coverage for 2015, and 5% below for 2016. The biggest delta is for Barclays (NYSE:BCS), BNP Paribas (OTCQX:BNPQY), and Goldman in 2015, and SocGen (OTCPK:SCGLY), HSBC, and BNP in 2016."
- Source: ZeroHedge
Fri, Oct. 2, 9:08 AM
- September's weak print has combined with a sizable downward revision to August's already so-so numbers to push rate hike expectations into late Q1 or Q2 of next year.
- S&P 500 futures are down 1.2%, but the Financial SPDR (NYSEARCA:XLF) is off 2% as the yield-starved names which make up the ETFs holdings look like they're going to have to wait at least a little while longer for higher rates. The SPDR Regional Bank ETF (NYSEARCA:KRE) is lower by 2.75%.
- Premarket action in individual names: Citigroup (NYSE:C) -2.25%, BofA (NYSE:BAC) -2.8%, JPMorgan (NYSE:JPM) -3.1%, Fifth Third (NASDAQ:FITB) -2.6% (also hit with a Goldman downgrade to Neutral), Regions Financial (NYSE:RF) -1.8%, Schwab (NYSE:SCHW) -2%, E*Trade (NASDAQ:ETFC) -2.3%, MetLife (NYSE:MET) -2%.
- Previously: Futures turn sharply lower after weak jobs report (Oct. 2)
- Previously: Treasurys to the moon after lame jobs report (Oct. 2)
- Previously: Big miss for jobs numbers (Oct. 2)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KBWR, KRU, RWW, RYF, FINZ, KRS
Thu, Oct. 1, 5:11 PM
- JPMorgan Chase (NYSE:JPM) will pay almost a third of a $1.86B settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit default swaps market, Bloomberg reports.
- JPM reportedly will pay $595M, followed by Morgan Stanley (NYSE:MS) with $230M, Barclays (NYSE:BCS) at $175M, Goldman Sachs (NYSE:GS) at $164M, Credit Suisse (NYSE:CS) at $160M and Deutsche Bank (NYSE:DB) at $120M; BofA (NYSE:BAC), BNP Paribas (OTC:BNPZY), UBS, Citigroup (NYSE:C), Royal Bank of Scotland (NYSE:RBS) and HSBC would pay less than $100M each.
- The deal would avert a trial and end years of litigation by hedge funds, pension funds, university endowments, small banks and other investors, who sued as a group.
Wed, Sep. 30, 8:23 AM
- With some questioning if Bank of America's (NYSE:BAC) cost-cutting strategy under CEO Brian Moynihan is losing steam, the bank yesterday began laying off roughly 200 employees in its trading and investment-banking units.
- In recent years, those units generated up to 40% of bank revenue with less than 10% of the company's staff, but BofA is the only major U.S. bank which posted a decline in trading and investment banking revenue in H1. It's also lost ground in areas targeted for growth like M&A.
- "The rules have changed," says COO Thomas Montag, who is in charge of the units. The bank, he says, is no longer going to do business in some products and activities it previously engaged in.
- The news is not all bad. Montag's push to get the investment bank to work with the wealth management and the consumer bank (he showed up at one bank function with a hat and t-shirt emblazoned with the words "Cross Sell") appears to be paying some dividends. Referral volume of 4.2M in 2014 gained from 300K in 2010, with a success rate of 20%.
- Source: WSJ's Christina Rexrode and Peter Rudegeair
Tue, Sep. 29, 11:12 AM
- As early as today Bank of America (BAC -0.2%) is expected to announce a couple of hundred layoffs in its global banking and global markets units, according to the WSJ.
- The action is not surprising given the bank's focus on trimming costs (especially if revenues don't improve), and a more general industry pattern of cutting jobs ahead of bonus season.
- Speaking at a conference earlier this month, CEO Brian Moynihan said he expected FICC revenue to fall another 5-6% in Q3.
Tue, Sep. 22, 10:18 AM
Tue, Sep. 22, 9:22 AM
- The Canada Pension Plan Investment Board says it's voted to strip Bank of America (NYSE:BAC) CEO Brian Moynihan of his chairman's role. With 103M shares, or roughly 1% of BofA, the Canada Plan is the largest shareholder so far to declare its intentions.
- Source: Reuters
- The bank's three largest investors - Vanguard, State Street, and BlackRock - haven't tipped which way they'll vote, but they are expected to support Moynihan, and their support is likely the reason Moynihan even has a fighting chance today.
- Previously: NYC to vote against Moynihan at Bank of America (Sept. 18)
- Previously: South Korea SWF dissents against Moynihan (Sept. 15)
- Previously: Bloomberg: Odds are on Moynihan winning chairman vote (Sept. 11)
Tue, Sep. 22, 2:21 AM
- Bank of America (NYSE:BAC) CEO Brian Moynihan faces one of the toughest tests of his career today when shareholders decide whether to strip him of his role as chairman of the board.
- The bank argues that it needs the flexibility to grant him one or both titles, but opponents say the two roles should be separated to allow for greater oversight.
- The vote is expected to be close and BofA says it will honor the outcome.
Sun, Sep. 20, 11:03 AM
- HP (NYSE:HPQ) recently announced that it would cut around 30K jobs, but despite its size, the corporate layoffs are not the largest of the recent past.
- According to outplacement firm Challenger, Gray & Christmas, the following list can claim that distinction.
- IBM (NYSE:IBM) layoffs: 60K - July 1993
- Citigroup (NYSE:C) layoffs: 50K - November 2008
- Sears (NASDAQ:SHLD) layoffs: 50K - January 1993
- General Motors (NYSE:GM) layoffs: 47K - February 2009
- AT&T (NYSE:T) layoffs: 40K - January 1996
- Ford (NYSE:F) layoffs: 35K - January 2002
- Kmart (SHLD) layoffs: 35K - January 2003
- Circuit City layoffs: 34K - January 2009
- Boeing (NYSE:BA) layoffs: 31K -September 2001
- Bank of America (NYSE:BAC) layoffs: 30K - September 2011
Fri, Sep. 18, 9:01 AM
- New York City's $165B pension funds hold 25.2M shares of Bank of America (NYSE:BAC), putting them in about the top 60 shareholders. Overseen by New York Comptroller Scott Stringer, they will vote on Sept. 22 to strip CEO Brian Moynihan of his chairman title.
- NYC joins other heavyweights like the California Public Employees' Retirement System and the California State Teachers' Retirement System in lining up against Moynihan for what's expected to be a very close vote.
Thu, Sep. 17, 2:37 PM
- It'll be at least a little while longer until banks and insurers get the higher rates they are hoping will boost sluggish profits, as the Fed holds its fire this month.
- The "dots" however are still projecting at least one rate hike before year-end.
- The SPDR KBW Regional Banking ETF (KRE -1.4%), and the SPDR KBW Bank ETF (KBE -1.2%).
- BofA (BAC -1.7%), Wells Fargo (WFC -1.2%), Regions (RF -2%), KeyCorp (KEY -1.8%), BB&T (BBT -1.7%), Fifth Third (FITB -2.4%), MetLife (MET -2.2%), Prudential Financial (PRU -1.9%), Schwab (SCHW -2.2%), Ameritrade (AMTD -2%), E*&Trade (ETFC -1.2%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, PSCF, FINZ, KRS
Thu, Sep. 17, 8:59 AM
- Bank of America (NYSE:BAC) CEO Brian Moynihan's prepared presentation is mostly familiar material to anyone who's followed the bank - where things stood when he took over, and the improvement since.
- Presentation slides
- Notable is the $1.15T deposit base - its value will be more visible when rates rise, says Moynihan. The FOMC decision comes later today.
- Taking questions, Moynihan says he expects FICC revenue to fall 5-6% in Q3, about the same as what Ciit's John Gerspach hinted at in his presentation yesterday.
- The topic of the vote on whether Moynihan can keep both the CEO and chairman title did not come up.
Wed, Sep. 16, 12:39 PM
- Merger-and-acquisition volume in 2016-17 should be $3.3T-$4.5T, says Guggenheim, up from its previous forecast of $2.7T-$4.5T. The current drivers of M&A are likely to remain in place; macroeconomic conditions may remain uneven; and several specific factors may compel consolidation in certain industries. Health care, media, and telecom activity has been robust, and should stay so. Activity in energy should increase, but banking M&A should stay subdued.
- The winners? U.S. bulge bracket and boutique firms have gained market share at the expense of European and other non-U.S. companies. Showing the most market share gains is Goldman Sachs (NYSE:GS), followed by Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Citigroup (NYSE:C). Goldman remains Guggenheim's Best Idea, and BofA and Ciit remain buys, partly thanks to the M&A thesis.
Tue, Sep. 15, 3:07 PM
- Korea Investment Corp. first invested $2B in Merrill Lynch in 2008, later bought more stock in Bank of America (NYSE:BAC), and now is among the top 10 shareholders with a stake valued at roughly $1.2B (ouch).
- Not only is the fund voting against the proposal to keep Brian Moynihan in both the chairman and CEO roles, it has contacted a number of U.S. institutional owners of BofA to work and communicate regularly on shareholder issues.
- Among the changes sought by KIC are "a more realistic business vision," and "a more tangible succession plan."
- Source: WSJ
Fri, Sep. 11, 7:22 AM
- BlackRock, Vanguard and other institutions among Bank of America's (NYSE:BAC) top-10 shareholders typically side with management in keeping the CEO and chairman's roles combined, according to their proxy guidelines.
- "The very real risk of disruption from separating the roles is not worth the theoretical benefits that may come,” says public-company advisory attorney Avrohom Kess.
- CLSA's Mike Mayo concedes it's a tough battle for anyone like him who thinks the BofA proposal should be decline. "The big funds generally think a combined CEO-chairman is fine. I’d say this is an exception to the rule, given the poor oversight at Bank of America’s board.”
- Previously: Buffett: Still a fan of IBM and Moynihan (Sept. 8)
- Previously: Bank of America makes its own vote push (Sept. 8)
Bank of America Corporation is a bank holding and a financial holding company. Through its subsidiaries, it provides banking and non-banking financial services and products throughout the United States and in selected international markets.
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