Yesterday, 12:45 PM
- "The U.K. is unlikely to formally exit the EU for at least two years, and during this period there will be no change in the way Citi (C -8.3%) is able to conduct its business," say CEO Michael Corbat and CEO of EMEA Jim Cowles in an internal memo.
- The bank employes 9K in the U.K, many of whom are EU nationals.
- Most important, goes the memo, are the bank's clients who will need Citi's support as they work through how yesterday's vote affects them.
Yesterday, 5:22 AM
- Banks across the globe are taking a serious beating post-Brexit.
- Much of the regulations that govern the financial services industry and allow for cross-border transactions are at the EU level, meaning regulatory changes will need to be negotiated and altered from their current financial infrastructure.
- Banking stocks premarket: BCS -25%, RBS -24%, LYG -27%, HSBC -10%, DB -16%, UBS -10%, C -7.5%, BAC -7%, JPM -6%, WFC -5%, GS -5%, MS -5%.
- ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
Thu, Jun. 23, 4:51 PM
- Ally Financial (NYSE:ALLY): Actual end of 2015 CET1 ratio of 9.2%, Q1 2018 CET1 ratio under severely adverse scenario of 6.1%, minimum 6.1%.
- American Express (NYSE:AXP): Actual 12.4%, Q1 2018 12.3%, minimum 11.4%.
- Bank of America (NYSE:BAC): Actual 11.6%, Q1 2018 8.1%, minimum 8.1%.
- BNY Mellon (NYSE:BK): Actual 11.5%, Q1 2018 11.2%; minimum 10.5%.
- BB&T (NYSE:BBT): 10.3%, 6.9%, 6.9%
- BBVA Compass (NYSE:BBVA): 10.7%, 6.5%, 6.5%.
- BMO Financial (NYSE:BMO): 11.9%, 5.9%, 5.9%.
- Capital One (NYSE:COF): 11.1%, 8.2%, 8.2%.
- Citigroup (NYSE:C): 15.3%, 9.2%, 9.2%.
- Citizens Financial (NYSE:CFG): 11.7%, 8.8%, 8.8%.
- Comerica (NYSE:CMA): 10.5%, 8.3%, 8.3%.
- Discover (NYSE:DFS): 13.9%, 12.4%, 11.9%.
- Fifth Third (NASDAQ:FITB): 9.8%, 6.8%, 6.8%.
- Goldman Sachs (NYSE:GS): 13.6%, 10.2%, 8.4%.
- HSBC N.A. (NYSE:HSBC): 15.7%, 9.1%, 9.1%.
- Huntington Bancshares (NASDAQ:HBAN): 9.8%, 5%, 5%.
- JPMorgan (NYSE:JPM): 12%, 8.3%, 8.3%.
- KeyCorp (NYSE:KEY): 10.9%, 6.4%, 6.4%.
- M&T (NYSE:MTB): 11.1%, 6.9%, 6.9%.
- Morgan Stanley (NYSE:MS): 16.4%, 10%, 9.1%.
- Northern Trust (NASDAQ:NTRS): 10.8%, 9.6%, 9.6%.
- PNC Financial (NYSE:PNC): 10.6%, 7.6%, 7.6%.
- Regions (NYSE:RF): 10.9%, 7.3%, 7.3%.
- Santander Holdings (NYSE:SAN): 12%, 11.8%, 11.8%
- State Street (NYSE:STT): 13%, 9.6%, 9.6%
- SunTrust (NYSE:STI): 10%, 7.5%, 7.5%.
- TD Group (NYSE:TD): 13.1%, 8.4%, 8.4%.
- U.S. Bancorp (NYSE:USB): 9.6%, 7.5%, 7.5%.
- Wells Fargo (NYSE:WFC): 11.1%, 7.2%, 7.2%.
- Zions (NASDAQ:ZION): 12.2%, 6.6%, 6.6%.
- Previously: All 33 banks pass this year's stress tests (June 23)
Thu, Jun. 23, 8:57 AM
- At issue appear to be lengthy wait times and trouble activating accounts for the new Costco Anywhere Visa Card from Citigroup (NYSE:C). The cards became available for use on Monday as Citi took over the Costco (NASDAQ:COST) portfolio from American Express (NYSE:AXP).
- Costco's sales have slowed of late, with one reason possibly being "friction" from the credit-card switch, says Scott Mushkin from Wolfe Research.
- Citi says it's issued 11M cards and had received 1.5M customer calls by late Wednesday, but also says call volumes are returning to normal.
- Analysts are excited about the potential for lower costs at Costco. Morgan Stanley's Simeon Gutman figures 25% of Costco sales were made with AmEx, which carried a fee of 0.6%, costing the company $180M per year. With Visa, fees should fall to 0.1-0.4%, saving $60M-$150M annually.
Tue, Jun. 21, 8:56 AM
- Jefferies' fiscal quarters end one month ahead of those for JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C), and Bank of America (NYSE:BAC), so investors in those banks like to keep an eye out in order to get a preview.
- What they'll get from Jefferies' FQ2 is that fixed-income trading has experienced a sharp reversal to the upside after a lame Q1. Bond-trading revenue at Jefferies was up 55%, the largest quarterly gain since 2014, and the best Mar-May quarter since 2012. Wall Street executives for a few weeks have touted a Q2 trading rebound, and the news from Jefferies backs that up.
- On the downside, stock and bond underwriting income continued to slump.
Mon, Jun. 20, 8:24 AM
- Citigroup (NYSE:C) acquired more than $10.5B of receivables as part of the acquisition of Costco's U.S. co-brand credit card portfolio from American Express. The bank doesn't expect the deal to be material to its earnings this year.
- For Costco, it means the chain will finally begin accepting Visa cards after a 16-year relationship with AmEx.
Wed, Jun. 15, 3:17 PM
- Having already shed value in June as expectations for rate hikes evaporated, the financial sector (XLF +0.7%) is showing relative strength following the FOMC's standing pat and dialing back expectations for the future level of the Fed Funds rate.
- The S&P 500 is higher by just half the amount of the financials.
- Within financials, the banks (KBE +1.1%), (KRE +1.1%) are particularly strong, led by Bank of America (BAC +1.5%), Morgan Stanley (MS +1.3%), Citigroup (C +1%), BB&T (BBT +1.2%), Fifth Third (FITB +2.2%), SunTrust (STI +1.4%), Zion (ZION +1.3%).
Tue, Jun. 14, 3:48 PM
- The S&P 500 is down just 0.25%, but the financial sector (XLF -1.5%) is taking a far larger beating as the idea of higher interest rates fades, with German 10-year yields falling below zero, and the U.S. 10-year Treasury yield within sight of its all-time low. KBE -2.3%, KRE -2.3%
- The FOMC concludes its two-day policy meeting tomorrow, at which updated economic projections and dots will be unveiled, along with a Janet Yellen press conference.
- How much of the panic into fixed-income is due to concern about the U.K. exiting the EU will become evident next Thursday night as that country's Brexit votes are tallied.
- Bank of America (BAC -2.5%), Citigroup (C -3.1%), Wells Fargo (WFC -2.5%), Regions Financial (RF -2.9%), KeyCorp (KEY -3.7%), PNC Financial (PNC -2.4%), Fifth Third (FITB -2.6%), SunTrust (STI -2.8%), E*Trade (ETFC -2.6%), MetLife (MET -1.6%), Prudential (PRU -1.8%), BNY Mellon (BK -2%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF
Tue, Jun. 14, 7:32 AM
- Talks between Citigroup (NYSE:C) and potential suitors for its Brazilian retail unit are ongoing, but it could be up to three months before there's news of a deal, says Helio Magalhães, senior country executive for Citi in Brazil.
- He declined to name potential bidders, though Itau Unibanco (NYSE:ITUB) and Banco Santander Brasil (NYSE:BSBR) would fit the bill.
- Previously: Citi's sale of Brazilian unit to face tougher regulatory scrutiny (June 9)
Mon, Jun. 13, 2:45 PM
- Plenty of upside remains in E&P names even after sharp YTD gains, Morgan Stanley analysts say amid confidence that the oil market recovery is occurring and oil prices will need to hit $80/bbl or so to deliver the production growth the world will need.
- Given recent production outages, the firm sees a risk of an H2 pullback yet also a long-term recovery that is "the bigger and a higher conviction event in a low conviction world and we add risk, yet not go 'all-in' here."
- Stanley upgrades Concho Resources (CXO +0.1%) and Cenovus Energy (CVE +0.9%) to Overweight from Equal Weight, and says it also remains positive on Pioneer Natural Resources (PXD +0.6%), Devon Energy (DVN +2.4%), Continental Resources (CLR +1.7%) and Cimarex Energy (C -0.8%); the firm cuts Occidental Petroleum (OXY -0.3%) to Equal Weight from Overweight on relative value.
Thu, Jun. 9, 2:48 PM
- The Dodd Frank stress test (DFAST) results are due on June 23 and the Comprehensive Capital Analysis (CCAR) on June 29.
- Noting a severely adverse scenario even more rigorous than in the past, Morningstar's Dan Werner says it will be hard to read anything negative into a bank's passing the test.
- Barclay's Jason Goldberg points out Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) as two poised to thrive if the government were to allow them to draw down capital, but "when" is the big question as next year's tests are expected to be even harder. The two are trading at about 1x book and sport ROEs of roughly 10% - both gauges were about twice those amounts prior to the financial crisis.
- JPMorgan's Kian Abouhossein expects Citizens Financial (NYSE:CFG), Citigroup (NYSE:C), Bank of America (NYSE:BAC), and SunTrust (NYSE:STI) to have outsized increases in capital return this year, driven mostly by buybacks.
- One wild card: This year's tests requires banks to model for negative interest rates.
Thu, Jun. 9, 7:52 AM
- The already-concentrated nature of the local banking industry means any mergers should immediately be deemed "complex," says a member of Brazil's antitrust office.
- “I am really uncomfortable approving any transaction in the banking industry, especially one made by the nation’s four biggest banks," says Cristiane Alkmin Junqueira Schmidt.
- Citigroup (NYSE:C) earlier this year put its retail-banking and credit card operations in Brazil on the block, and the nation's top four lenders, including Itau Unibanco (NYSE:ITUB), and Banco Bradesco (NYSE:BBD) would be natural buyers.
- The antitrust agency yesterday approved Bradesco's purchase of HSBC's Brazilian operation, with the restriction that the bank refrain from additional purchases for 30 months. That deal also required more than the normal review.
Wed, Jun. 8, 3:17 PM
- The bank employs 9K in the U.K., but said it could look to spread some of that out across the EU in event of a Brexit, according to Reuters, citing an internal memo.
- Citi's (NYSE:C) attitude echoes that of JPMorgan boss Jamie Dimon. who last week said up to 4K of his bank's 16K U.K. jobs could vanish following a Brexit.
Mon, Jun. 6, 3:28 PM
- "It's a machine, no doubt about it," says one getting disgruntled customer of Wells Fargo (NYSE:WFC), which is one of only two U.S. companies which have produced at least $5B of net income in each of the last 14 quarters (Apple is the other).
- Worrying analysts though is that customers like the one above - his family has nine Wells products - appear to have had their fill, writes Ben McLannahan in the FT. Wells' lauded cross-sell ratio has fallen from an average of 6.36 products per household in Dec. 2013 to 6.29 a the end of last year."
- While the bank trades at a premium to U.S. peers in terms of multiple of net assets, that premium has shrunk to half the level of two years ago, and Wells recently cut some financial targets.
- Without a big rise in interest rates, says Standard Life's Chris Haimendorf, "it is very difficult to see how things can get even better from here."
- CEO John Stumpf - though acknowledging the low-rate issue - says there are plenty of avenues for growth. He notes peers like BofA (NYSE:BAC) and Citigroup (NYSE:C) closing branches or even pulling out of certain cities. Wells, on the other hand, is keeping its footprint, but adjusting its format with smaller "bodega branches."
- Stumpf: “All of our new account acquisition happens at one of our branches. If you shut that down, at least today, you shut down your front engine."
Mon, Jun. 6, 11:08 AM
- Massive capital builds (and returns) after 2017 for all of the money-center banks should add four or even five percentage points to EPS growth, says Portales Partners' Charles Peabody, figuring Citigroup (NYSE:C) for $90 stock by 2020.
- In the short term, though, energy-related loan losses could be a headwind. Peabody sees reserve builds of up to 15% over the next two years vs. typical provisions of just 5% for the global banks.
Mon, Jun. 6, 3:44 AM
- Goldman Sachs (NYSE:GS) received more than a quarter of a million applications from students and graduates for jobs this summer, a rising number that is way more than the bank could ever employ.
- The trend is mirrored at several other large banks such as JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), BofA (NYSE:BAC) and Citigroup (NYSE:C).
- According to figures provided to the Financial Times, the number of these applications has risen more than 40% globally since 2012.
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
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