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Nov. 4, 2015, 3:40 PM
- "This transaction is consistent with Bank of America’s (NYSE:BAC) ongoing efforts to simplify its business, in this instance, by outsourcing certain product manufacturing functions to an industry leader," says a bank spokesperson following yesterday's deal to sell its $87B AUM money-market business to BlackRock (NYSE:BLK).
- While ZIRP has crimped the profitability of money-market funds, the deal could wind up being a sweet one for BlackRock should rates rise, and the boosted size (AUM will rise to $372B from $285B) should bring needed efficiencies if rates don't move. "It's a challenge managing cash in a low interest-rate environment, so we have to be highly efficient," says Tom Callahan, co-head of global cash management. BlackRock will leapfrog JPMorgan to become the #2 money market fund family after the deal closes next year (Fidelity is #1).
- Terms were not disclosed.
Nov. 4, 2015, 12:19 PM
- David Leitch - who is retiring as Ford's general counsel - is set to be Bank of America's (NYSE:BAC) next chief lawyer, according to the WSJ.
- The hiring comes after a search which took far longer than expected after current general counsel Gary Lynch signaled months ago of his desire to step down.
- Leitch is 54 years old and has been with Ford for more than a decade. He's exiting on Jan.1.
- Lynch will stay with BofA in his role as vice chairman.
Oct. 30, 2015, 7:42 PM
- Bank of America (BAC -1.8%) has come to a $335M settlement of a lengthy federal suit where it was accused of misleading shareholders about mortgage-backed security exposure, and about its dependence on MERS, the national mortgage electronic registry.
- In its 10-Q filing, the bank said the $335M was fully accrued as of June 30, though the deal still needs final court approval.
- The suit was led by the Pennsylvania Public School Employees Retirement System, which said shareholders were misled into buying BAC stock in 2009 and 2010. It was allowed to go forward by a federal judge in July 2012.
- Shareholders had claimed the bank knew it couldn't raise enough capital if it revealed it had to buy back billions of dollars in securities, and that it knew MERS was so shoddy that it wouldn't be able to legally foreclose on thousands of delinquent mortgages.
Oct. 28, 2015, 12:42 PM
- With Carl Icahn's targeting of AIG, activists are clearly climbing higher on the financial-services food chain, writes David Reilly. The goal is to make the companies small enough to not be subject to the sorts of stringent D.C. regulations associated with being too-big-to-fail.
- A case in point is CIT Group, which last week announced the departure of John Thain and a plan to sell certain units. Thain's goal had been just the opposite - to turn CIT into a TBTF.
- The biggest of the big won't be quaking in their boots, says Reilly, noting the typical tools of the activist - boosting capital returns or levering up - would be dead on arrival in Washington. As much as investors would like to see Citigroup (NYSE:C) and Bank of America (NYSE:BAC) broken up in order to realize value - they haven't traded above book value in seven years - it's not going to happen this way.
- Previously: Carl Icahn targets AIG (Oct. 28)
- Previously: CIT Group soars after strategic shakeup (Oct. 22)
Oct. 22, 2015, 10:51 AM
- Bank of America (NYSE:BAC) declares $0.05/share quarterly dividend, in line with previous.
- Forward yield 1.24%
- Payable Dec. 24; for shareholders of record Dec. 4; ex-div Dec. 2.
Oct. 14, 2015, 10:15 AM
- Talking expense cuts on the earnings call, Bank of America (BAC +2%) CEO Brian Moynihan says it's happening in the back office - though overall headcount fell 1.5K in Q3, "client-facing" headcount added 1.6K workers.
- Moynihan also notes job cuts are slowing - the bank had cut 3K or more workers in each of the previous 15 quarters.
- Loan growth is the word: Excluding LAS (legacy assets & servicing), total loans and leases of $729B were up from $710B in Q2 and $668B a year ago.
- Mobile banking users grew to 18.4M, with 14% of deposit transactions completed through mobile devices. Financial centers are down 4% from a year ago to 4,741.
- Webcast and presentation slides
- Previously: Bank of America higher after earnings beat (Oct. 14)
- Previously: Bank of America beats by $0.04, beats on revenue (Oct. 14)
Oct. 14, 2015, 7:18 AM
- Excluding market-related adjustments, net interest income of $10.3B slipped from $10B in Q2 and $10.54B a year ago. Noninterest income of $11.171B fell from $11.629B in Q2, and rose from $10.99B a year ago.
- Excluding litigation, noninterest expense of $13.6B fell 4%. LAS noninterest expense excluding litigation of $900M fell 32%.
- Tangible book value per share of $15.50 up 10%. ROA of 0.82%, ROTCE of 10%. Fully phased-in CET 1 ratio of 11% up 60 basis points.
- Consumer Banking net income of $1.759B vs. $1.669B a year ago, on revenue of $7.832B vs. $7.749B. $13.7B of mortgages originated vs. $11.7B. Client brokerage assets of $117.2B up 8%.
- Global Wealth and Investment Management net income of $656M vs. $812M a year ago, on revenue of $4.468B vs. $4.666B.
- Global Banking net income of $1.277B vs. $1.521B a year ago, on revenue of $4.191B vs. $4.345B.
- Global Markets net income of $1.008B vs. $371M a year ago, on revenue of $4.071B vs. $4.161B. The boost is income is thanks to lower noninterest expense thanks to lower litigation cost. FICC revenue excluding net DCA fell 11% from one year ago. Equities excluding net DVA increased 12%.
- Conference call at 8:30 ET
- Previously: Bank of America beats by $0.04, beats on revenue (Oct. 14)
- BAC +1.4% premarket
Oct. 14, 2015, 7:02 AM
- Bank of America (NYSE:BAC): Q3 EPS of $0.37 beats by $0.04.
- Revenue of $20.91B (-2.4% Y/Y) beats by $140M.
Oct. 13, 2015, 5:30 PM
Oct. 7, 2015, 8:33 AM
- A badly-burned Bank of America (NYSE:BAC) won't do it anymore, but JPMorgan (NYSE:JPM) - aiming to make up for slowing business in its mortgage operation - is increasingly buying loans from smaller lenders, writes Dan Freed for Reuters.
- In H1, the Bank of Dimon bought 62% of the $58B in residential mortgages added to its books, up from 56% in 2014 and 37% in 2011. According to Inside Mortgage Finance, JPMorgan has shown the biggest increase among peers in so-called correspondent lending.
- "As they gain more confidence about the environment, they go right back to the correspondent channel for more volume," says analyst Charles Peabody. "There's more risk in being that far away from the customer," says BofA's Steve Boland, who leads mortgage and auto lending. For its part, JPMorgan says it only works with "experienced, well-managed, and high quality lenders," and reviews every loan in detail.
- Wells Fargo's (NYSE:WFC) Eric Stoddard - who runs the bank's correspondent business - says it's cheaper to buy mortgages from other lenders than to make the loans itself.
- "I think Bank of America's (policy) is a little foolish," says lender Ken Perimutter, whose PERL expects to make about $1.6B in home loans this year, and sell about 60% of those to JPMorgan.
Oct. 7, 2015, 7:59 AM| Oct. 7, 2015, 7:59 AM | 5 Comments
Oct. 5, 2015, 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
Oct. 2, 2015, 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
Oct. 1, 2015, 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.
Sep. 30, 2015, 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
Sep. 29, 2015, 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.
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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