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May 13, 2015, 3:35 PM
- "Life insurance activities alone did not lead to its designation," according to papers filed in U.S. District Count by the Financial Stability Oversight Council in response to MetLife's (NYSE:MET) suit over its non-bank SIFI designation.
- The FSOC says Met "engages in significant financial activities beyond simply selling life insurance," thus increasing its reliance on short-term funding. In a crisis, this could force the sale of assets "at a scale and speed that could impair or freeze up broader financial markets."
- Among those activities are the selling of guaranteed investment contracts (GICs), of which Met has $48B outstanding, funding agreements, and securities lending.
- Sounds like a roadmap to a settlement.
- Source: The WSJ's Leslie Scism
May 12, 2015, 4:46 AM
- Federal regulators are defending their heightened oversight of giant insurer MetLife (NYSE:MET), saying the company could pose a threat to the U.S. financial system because of its complex transactions and capital-markets activities.
- In January, MetLife became the first non-bank to challenge a decision by the Financial Stability Oversight Council that designated it as a SIFI, or systemically important financial institution.
May 7, 2015, 2:44 PM
- The insurer's strategic plan from May 2012 had a goal of operating ROE of 12-14% for 2016 (it was 11.7% in Q1). Low interest rates mean MetLife (MET +0.5%) is now aiming for the low end of that range, and buybacks are another headwind.
- The plan hoped for $8B in buybacks from 2012 to 2016, and Met - still unsure of capital requirements for non-bank SIFIs - has been cautious. CEO Steven Kandarian on today's earnings call (transcript): "We have not yet seen draft capital rules, and there is no clarity on when those rules will be issued. As a result, it is likely that share repurchases will be substantially lower than we had assumed in our strategic plan."
- The company did complete its $1B buyback plan in Q1, with Kandarian saying Met was pretty good about buying on the dips - the average purchase price was $49.56 vs. the current $52.13. However, buybacks since 2012 have been just $2B, or 25% of what the insurer hoped for when it set out its goals three years ago.
- Also suffering from unknown capital requirements is M&A, and acquisitions have contributed about $200M to earnings, or just half of what the plan anticipated.
- Previously: MetLife slips a little after bottom line beat (May 6)
- Previously: MetLife beats by $0.03, misses on revenue (May 6)
May 6, 2015, 4:41 PM
- Q1 operating earnings of $1.64B or $1.44 per share vs. $1.56B and $1.37 one year ago.
- Book value per share (excl. AOCI) of $50.45 vs. $47.70.
- Americas operating earnings of $1.4B up 6% on a constant currency basis. ROE of 14.1%. Premiums, fees, and other revenues of $9.2B up 3%.
- Asia operating earnings of $327M up 8% on a constant currency basis. ROE of 11.4%. Premiums, fees, and other revenues of $2.2B up 6% on a constant currency basis.
- EMEA operating earnings of $70M up 35% on a constant currency basis. ROE of 8.4%. Total sales up 14% thanks to strong growth in employee benefit and accident and health sales.
- Net investment income of $5B down 2% Y/Y.
- Conference call tomorrow at 8 ET
- Previously: MetLife beats by $0.03, misses on revenue (May 6)
- MET -0.45% after hours
May 6, 2015, 4:10 PM
- MetLife (NYSE:MET): Q1 EPS of $1.44 beats by $0.03.
- Revenue of $17.04B (-0.5% Y/Y) misses by $490M.
Apr. 29, 2015, 12:14 PM
- The major averages are lower by 0.5% or more, but margin-starved financials are in the green as rates head higher both here and overseas.
- Previously: Major selloff in fixed income (April 29)
- The 10-year U.S. Treasury yield is up six basis points to 2.06% - nearing its highest level of the year - and European yields are shooting up even faster ... All this despite the absence of any GDP growth in the U.S. in Q1.
- Considered perhaps the most "asset-sensitive" of the TBTF banks, Bank of America (BAC +1.9%) is leading that group higher.
- Among regional names: Regions Financial (RF +1.1%), Fifth Third (FITB +1.3%) SunTrust (STI +0.9%), BB&T (BBT +0.8%).
- Insurers: MetLife (MET +2.4%), Prudential (PRU +1.5%), Lincoln National (LNC +1.8%).
Apr. 28, 2015, 10:37 AM
- MetLife (NYSE:MET) declares $0.375/share quarterly dividend, 7.1% increase from prior dividend of $0.35.
- Forward yield 3.0%
- Payable June 12; for shareholders of record May 11; ex-div May 7.
Apr. 20, 2015, 3:13 PM
- The Bank of England months ago penned a letter to the U.S. Treasury asking why The Oracle's reinsurance operation has been left off of Financial Stability Board's provisional list of too big too fail institutions.
- MetLife (NYSE:MET) - which has sued the U.S. government over its curious designation as a SIFI - would also probably like to know, as would a number of other primary insurers that have been so tagged.
- Berkshire (BRK.A, BRK.B) is part of a group of reinsurers - Swiss Re (OTCPK:SSREY) and Munich Re also come to mind - which have thus far escaped such scrutiny, even though primary insurers might argue the reinsurers are more important to the global financial system. The Basel-based FSB was supposed to make a reinsurance list public last year, but postponed the effort in November "pending further development of the methodology."
- Insurance is Berkshire's most significant business - accounting for 27% of net earnings last year - and providing Warren Buffett with the capital to invest in stocks and acquisitions.
- Source: FT
Apr. 14, 2015, 8:51 AM
- Bill Wheeler has been president of the Americas since 2011, but will retire, effective August of this year.
- Wheeler led the restructuring and transformation of the U.S. retail operation as well as the acquisition of Chile's ProVida.
- MET -1.5% premarket.
Mar. 26, 2015, 6:38 PM
- MetLife (NYSE:MET) is granted a six-month extension by the Fed and the FDIC to file its first plan showing how it could collapse without causing broader economic damage; it will now have to submit its first resolution plan by Dec. 31, 2016.
- The regulators voted at the request of the judge presiding over MET's lawsuit challenging its designation as a "systemically important financial institution" last fall.
- "Living will" plans, designed by companies with oversight from regulators, lay out a path that would allow the companies to declare bankruptcy if necessary without taxpayer assistance.
Mar. 24, 2015, 8:05 AM
- At least so far, this year is looking a lot like the last few years to those waiting for higher interest rates to boost spread income. Writing in the company annual report, MetLife (NYSE:MET) CEO Steven Kandarian says the insurer continues to expect a 10-year Treasury yield of 4-4.5% by year-end 2017, but the risk remains of a miss to the underside.
- If rates do stay low, says Kandarian, maintaining last year's 12% ROE over the long term would prove difficult. Investors, says Kandarian, should judge financial companies not on absolute ROE, but on the spread between ROE and 10-year yields.
- It makes sense, writes John Carney, but sounds like a warning signal on returns going forward, not just for MetLife, but its insurance peers and the banks.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, KIE, SEF, IYG, IAK, FXO, FNCL, FINU, RWW, RYF, KBWP, KBWI, FINZ
Mar. 17, 2015, 12:09 PM
- Scouring the globe for something with a decent yield, MetLife (MET -1.1%) loans a total of $146M to Kennedy Wilson (KW -0.6%) to finance four properties in Ireland.
- The four include three Class A multi-family assets and a multi-tenant office property. All are located in the Dublin area.
- MetLife Real Estate Investors originated more than $2.1B in commercial mortgage loans in the U.K. last year, and MetLife has a commercial mortgage portfolio of about $3.5B in the U.K. and Ireland.
Mar. 11, 2015, 3:20 PM
- "“In the case of Brazil, we think that we need to gain more scale,” says Roberto Walker, president of Latin America for Principal Financial Group (PFG +0.9%). "We are always very actively looking for strategic acquisitions, particularly in the case of asset management and mutual funds," he says, adding Mexico as also being a target.
- PFG and MetLife (MET +0.7%) have recently expanded in Chile, and both held events today in Santiago focusing on opportunities to provide their products to the fast-growing middle-class and affluent savers of Latin America - particularly as governments push citizens for privately-managed retirement plans.
- “We’ve grown by acquisitions, and we’ll continue to do that,” says Bill Wheeler, head of the Americas at MetLife. “But we’ve also grown organically.”
Mar. 6, 2015, 9:46 AM
- A turnaround from the action earlier this year - financials (XLF +0.9%) are marching higher in early action as the averages slip, as nervous investors buy back in following the stress test results. Also helping are surging interest rates following the strong jobs number.
- Looking at a pretty broad screen of bank names, just two - Goldman Sachs and Zions, both of which barely passed the stress test - are lower. Among the others: Bank of America (BAC +3.7%), JPMorgan (JPM +1.1%), U.S. Bancorp (USB +1.6%), Regions FInancial (RF +2.3%), KeyCorp (KEY +2.7%), PNC Financial (PNC +2.3%), BB&T (BBT +2.4%), Fifth Third (FITB +2.2%), Comerica (CMA +3.8%), BNY Mellon (BK +2.9%).
- Among those starved for higher rates: MetLife (MET +3%), Prudential (PRU +3.3%), Lincoln National (LNC +4.1%), AIG (AIG +1.4%), Hartford (HIG +2%), E*Trade (ETFC +3.9%), Schwab (SCHW +4.4%), Ameritrade (AMTD +4.3%).
- Previously: Futures slip after jobs number as yields and dollar soar (March 6)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, KBWC, FINZ, KRS
Mar. 3, 2015, 3:57 PM
- MetLife (MET +0.1%) in January sued the Financial Stability Oversight Council over its designation of the insurer as a systemically important. The two parties have now asked a court to agree to give the FSOC until May 7, rather than March 16, to respond.
- The case is an important one as it could shed some light on exactly what the secretive council was looking at when it decided to hand out the non-bank SIFI label to not just MetLife, but also AIG and Prudential (who are not involved in any suit against the Council).
Feb. 25, 2015, 2:35 PM
- At issue were mortgages issued which MetLife (MET -0.3%) allegedly knew did not meet GSE standards, but which the insurer allowed to be insured by Frannie anyway. MetLife had previously reserved for the fine and, of course, exited the mortgage business a few years back.
- In other news, the company boosts the size of its board to 13 with the addition of Ned Kelly who has been in the financial services business for four decades, most recently as chairman of the institutional clients group at Citigroup.
MetLife Inc is a provider of insurance, annuities & employee benefit programs in United States, Japan, Latin America, Asia, Europe & Middle East. It offers life insurance, annuities, property & casualty insurance, and other financial services.
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