Thu, Aug. 18, 5:32 AM
- Sixteen banks, including JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS), are being sued by funds in the U.S. for allegedly manipulating a key Australian interest rate benchmark to generate hundreds of millions of dollars in illicit profits.
- The class action, claims they sought to fix the bank bill swap rate, the local equivalent of Libor, which is used to price floating-rate bonds and syndicated loans.
Tue, Aug. 16, 10:02 AM
- Currently head of digital for consumer and community banking at JPMorgan (NYSE:JPM), Gavin Michael is expected today to be announced as a new hire at Citigroup (NYSE:C). Michael will lead the "long-term strategic direction" of consumer-banking technology, according to a memo from Stephen Bird, head of Citigroup's consumer bank.
- Source: Christina Rexrode at the WSJ.
- Michael will be based in New York, and be in charge of about 4K tech employees in Citi's consumer bank. He's expected to start in November, and is replacing Mark Torkos, who retired last month.
- JPMorgan notified its staff last week of Michael's departure, and has named head of consumer and community banking operations Bill Wallace as its new digital chief.
- For Citi's part, the Michael move comes just days after the announced departure of Citi FinTec head Heather Cox.
Fri, Aug. 5, 5:37 PM
- Citigroup (NYSE:C) has prevailed in an $800M court action filed by a billionaire accusing it of fraud tied to subprime and toxic mortgages.
- Arthur Williams -- founder of what would become Primerica Financial Services -- had sued the bank and two CEOs (Charles Prince and Vikram Pandit) because he says he had planned to sell his 17.6M shares in May 2007.
- When the bank assured investors it was in good shape, he says, he sold just 1M shares instead around the prevailing price of $51.59/share. Two years later he sold the rest of his stake at $3.09/share, and sued for the difference.
- An appeals court in Manhattan today upheld an October 2013 ruling and said the defendants weren't liable to entities overseen by Williams and his wife. A Citigroup spokeswoman says the bank is pleased with the decision, while Williams' lawyer says their team is considering appeal options.
Fri, Aug. 5, 2:56 PM
- Citigroup (C +3.5%) is the buyer of a portfolio of credit-default swaps from Credit Suisse (NYSE:CS) which is pulling out of some securities businesses in a reshaping, Bloomberg reports.
- The gross notional value of the portfolio is said to be about $380B, and last week Credit Suisse said selling it would reduce its leverage exposure by $5B.
- Citigroup had bought a similar batch of credit derivatives (about $250B in notional value) from Deutsche Bank last year, and it has more total derivatives than any other U.S. lender.
Thu, Aug. 4, 1:30 PM
- The bank earlier this year said its consumer operations in Brazil, Argentina, and Colombia were on the block. Speaking today in Rio de Janeiro, Helio Magalhães, head of Citi's (NYSE:C) Brazil unit. said a formal announcement of at least some sales should come in September.
- At least in Brazil, Citi has struggled to compete against the largest five banks, which together control nearly 70% of assets in the country's financial system. Citigroup's assets there total just 1% of the market share. Possible buyers include at least two of those big five: Itau Unibacno (NYSE:ITUB) and Banco Santander Brasil (NYSE:BSBR).
- Source: WSJ
Tue, Aug. 2, 7:04 AM
- July monthly performance was: +3.3%
- 52-week performance vs. the S&P 500 is: -5%
- No dividends were paid in July
- Top 10 Holdings as of 3/31/2016: JPMorgan Chase & Co (JPM): 2.91993%, US Treasury Note 1.125%, Citigroup Inc (C): 2.71706%, US Treasury Note 0.5%, General Electric Co (GE): 2.15542%, Bank of America Corporation (BAC): 1.79099%, Morgan Stanley (MS): 1.36115%, Target Corp (TGT): 1.36065%, US Treasury Note 1.625%, Carnival Corp (CCL): 1.28533%
Wed, Jul. 27, 11:49 AM
- Having covered bank stocks on and off since 1985, the team at Oppenheimer says portfolio managers have never been fans of the sector, but the hatred today is off the charts - even as the reasons for that hatred have gone away.
- Banks used to be opaque, they overpaid for acquisitions, and often had frothy growth that almost invariably backfired. It's hard to say that today. While banks will always be somewhat opaque, today they're returning capital rather than blowing it on acquisitions, and their "growth initiatives are the epitome of financial probity."
- Oppenheimer's six large bank composite has on average churned out quarterly pretax earnings of $31.4B per quarter since 2013 (including $30.5B in Q1 this year, and $33.4B in Q2). That's a lot of money, especially since most of it is being used to buy back stock at less than 10x earnings and below tangible book value.
- While lower-for-longer interest rates will continue to hamper earnings, banks are managing appropriately for the current environment, and the math of buying back stock below book will eventually win the day.
- Favorite picks are Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Goldman Sachs (NYSE:GS).
- ETFs: KBE, KRE
Tue, Jul. 26, 1:37 PM
- "Banks are figuring out that providing every product and every service to every client in every country was just wrong," says former Citigroup (NYSE:C) CEO Vikram Pandit, who used to tout his bank's "globality." Prior to the financial crisis, Citi had 268M customers, and today - after selling or shutting down retail operations across the globe, cutting its U.S. branch network by two-thirds, exiting subprime lending, student loans, and life insurance - has lost about 25% of its customers (along with more than 40% of its workforce).
- "We're not close to being done," says Pandit.
- Similar changes have taken place at HSBC, which actually had an even larger global footprint than Citigroup. For its part, the bank's been using six "filters" to determine whether it needs to exit certain locations or businesses. Among them are profitability, efficiency, and risk of financial crime.
- So far, the cuts haven't manifested themselves in increased profitability. ROE at both lenders remains low (8% for C, 7% for HSBC; both were 16% pre-crisis). And it hasn't stifled calls to break up the big banks.
- Source: Bloomberg's Yalman Onaran
Wed, Jul. 20, 4:41 PM
Tue, Jul. 19, 11:59 AM
- With interest rates continuing to pressure revenues, banks - after years of slashing costs - are coming under renewed pressure to trim even more expenses. But what's left?
- Source: Dan Freed and Olivia Oran at Reuters
- The digital revolution has raised hopes for leaner operations, but Bank of America (BAC +0.7%) still spends $1B per year shuffling papers and transporting money in armored trucks. Other costs like mailing paper account statements, replacing lost credit cards, and repairing ATMs haven't gone anywhere either.
- JPMorgan (NYSE:JPM) - which for years has bragged about technology allowing customers to bank with their smartphones - had to start hiring tellers again due to customer complaints (it's also hiking pay).
- Count Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) to the above two names as those reporting year-over-year profit declines thanks to the top-line challenges posed by low rates. On the conference call, management faced continued grilling about operating expenses. For its part, Bank of America promised another $3.3B in annual expense cuts.
Tue, Jul. 19, 3:45 AM
- The Republican convention has left Wall Street banks on edge by embracing a proposal to reinstate Glass-Steagall, the banking separation rule which was dropped during the Clinton administration after a bipartisan effort to overturn it.
- The repeal is often cited as a cause of the financial crisis in 2008, even though two of the institutions at the core of the crisis, Lehman and Bear Stearns, were unaffected by the act's prohibition of combining investment and commercial banks.
- Related tickers: C, JPM, BAC, WFC, GS
Fri, Jul. 15, 11:07 AM
- The bank earned $1.24 per share in Q2, topping estimates by $0.13, but one year ago, analysts were estimating Citi (NYSE:C) would earn $1.49, reminds John Carney. Just two months ago, consensus was a full $1.26.
- For full-year 2016, one year ago, analysts were forecasting $5.99, and today the average is $4.53 - a 24% decline which about matches the drop in the share price.
- Helping the quick cut in Street forecasts over the past few weeks, was CEO Michael Corbat in early June saying he thought Q2 trading revenue would be up only slightly vs. Q1. It ended up rising 12%, though this was likely due to a late-month, post-Brexit flurry of action, rather than Corbat low-balling.
- After an early rise, the stock has turned lower by 0.7% on today's session.
- Previously: Citi profit drops, but tops expectations (July 15)
Fri, Jul. 15, 10:10 AM
- Wells Fargo ticks off 20 S&P 500 stocks with the most upside potential vs. consensus, and the 20 with the most downside risk vs. consensus.
- The list is compiled by comparing the midpoint of Wells Fargo Securities valuation ranges to consensus fair value estimates, volatility adjusting the percentage difference, and ranking the resulting score.
- Upside: AEE, BEN, CCL, DVA, EIX, ES, EXC, FTR, HUM, INTC, JNJ, LNT, PEG, PNW, SCG, T, WEC, WU, XEL, XOM.
- Downside: ANTM, C, CI, COF, EQT, FOXA, FSLR, GS, KIM, LH, MON, MSI, MYL, NVDA, NWSA, SLG, TIF, TSO, UA, WLTW.
Fri, Jul. 15, 8:17 AM
- Q2 net income of $4B or $1.24 per share vs. $4.8B and $1.51 a year ago. Revenue of $17.5B down 10%. Excluding DVA, revenues fell 8%, and EPS 14%.
- CET 1 ratio of 12.5% up 110 bps Y/Y. ROE of 7% down 210 bps. Tangible book value per share of $63.53 up from $59.18.
- Loans of $634B flat Y/Y. Deposits of $938B up 5% in constant dollars.
- Global Consumer Banking revenue of $7.733B down 6% Y/Y. Reserve build of $32M vs. $87M in Q1 and release of $101M a year ago. North America GCB revenue of $4.8B down 3%, net income of $843M down 22%.
- Institutional Clients Group revenue of $8.846B down 1% Y/Y. Fixed income revenue of $3.468B up 12% from Q1, up 14% Y/Y. Investment banking revenue of $1.217B up 39% from Q1, down 6% Y/Y.
- Citi Holdings revenue of $843M down 57% Y/Y. EOP assets of $66B down 47%.
- CC at 11:30 ET
- Previously: Citigroup beats by $0.14, beats on revenue (July 15)
- C +0.8% premarket
Fri, Jul. 15, 8:01 AM
Thu, Jul. 14, 5:30 PM
Citigroup, Inc. is a global financial services holding company that engages in the provision of financial products and services to consumers, corporations, governments, and institutions. It offers savings, checking, online banking, individual retirement accounts, and private banking products and... More
Industry: Money Center Banks
Country: United States