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Mar. 23, 2015, 8:58 AM
- In what could be a big boon for overseas banks doing business in China, Beijing is mulling sweeping changes for the securities industry which would include allowing foreign banks controlling stakes in their local joint ventures, reports Bloomberg.
- The looser restrictions would let players like Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB), and Citigroup (NYSE:C) compete more effectively with dominant incumbents like Citic Securities.
- Current rules approved in 2012 allow overseas banks to just 49% ownership of securities firms. Prior to that, the limit was 33%. The above-listed banks have all entered the market since 2007.
Mar. 20, 2015, 8:22 AM
- Morgan Stanley (NYSE:MS) won more than 90 prime-brokerage mandates in Asia last year at a time when toughened capital and liquidity rules had rivals pulling back.
- “Funds of all sizes have value to us,” says Lorraine Wong, Morgan's head of Greater China brokerage. “While larger clients are clearly critical to our franchise, we are also focused on identifying the next generation of up-and-coming funds.”
Mar. 19, 2015, 2:40 PM
- An investment banker who co-heads Morgan Stanley's (MS -2.4%) capital markets arm, Raj Dhanda moves to wealth management, where he'll replace Andy Saperstein as head of investment products and services. Saperstein moves over to Morgan's banking and trading division, where he'll be the co-COO, taking over from Mo Assomull.
- Assomull will take Dhanda's job in the investment banking operation.
- The moves appear aimed building a bench for the C-suite.
- “Cross-pollinating key leaders across our major businesses further knits the Morgan Stanley culture and enhances our ability to deliver the entire firm for the benefit of our clients," says CEO James Gorman.
- Source: WSJ
Mar. 19, 2015, 12:35 PM
- “It would be very much worth considering treating those two firms” like other banks, says Fed governor Daniel Tarullo, speaking to the Senate Banking committee.
- At issue is a clause in 1999's Gramm-Leach-Bliley Act (that era's version of Dodd-Frank) which "grandfathered" in any commodity trading and investment activities for investment banks who later converted to BHCs, i.e.Goldman Sachs (GS -1.1%) and Morgan Stanley (MS -2.1%).
Mar. 17, 2015, 11:10 AM
- A possible harbinger of things to come next month when the big banks report Q1 earnings, profits at Jefferies plunged in FQ1 (ended Feb. 28), with FICC, capital markets, and investment banking particularly weak.
- Previously: Poor results at Jefferies sinks Leucadia (March 17)
- Jefferies parent Leucadia is lower by 3.7%. Goldman Sachs (GS -1.1%), Morgan Stanley (MS -0.9%), JPMorgan (JPM -1.2%), Citigroup (C -0.1%), Bank of America (BAC -0.8%).
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Mar. 12, 2015, 12:47 PM
- Citigroup's (C +2.7%) $7.8B in buybacks was 10% higher than estimated by MKM analyst David Trone. Combined with the nickel dividend, that's total shareholder returns of $8.4B vs. his $7B expectation.
- Bank of America (BAC -1%) - though given just conditional approval - is set for $4B in buybacks and a nickel dividend. That's a total return of $6.1B vs. Trone's $3.1B estimate. Trone notes the bank can proceed with its buyback prior to resubmitting plans.
- JPMorgan's (JPM +1%) $6.4B buyback was shy of Trone's $7B estimate, but the 10% dividend increase was better than forecast. The total capital return of $12.9B vs. his $13.2B forecast is a "marginal negative."
- The dividend hike to $0.65 at Goldman (GS +2.1%) beat Trone's expectation of $0.62. As for the buyback, Goldman's policy of not disclosing the amount remains in place.
- Morgan Stanley's (MS +4.5%) capital return of $4.3B is more than double Trone's $1.9B estimate.
- Source: Benzinga
Mar. 12, 2015, 8:07 AM
- Citi's (NYSE:C) quarterly dividend of $0.05 and $7.8B in buybacks were somewhat better than expected, and Regions Financial's (NYSE:RF) buybacks of $875M was higher than the $625M estimate (Regions also boosted its dividend by 20%).
- KeyCorp (NYSE:KEY), Morgan Stanley (NYSE:MS), and SunTrust (NYSE:STI) were also winners after announcing larger-than-forecast buybacks.
- Bank of America (NYSE:BAC) is a "slight disappointment," but some investors had feared an outright rejection of the capital plan, so maybe the resubmission request isn't the worst outcome.
- Previously: Corbat likely keeping his job as Citi cruises through CCAR (March 11)
- Previously: Regions Financial boosts payout by 20% after CCAR approval (March 11)
- Previously: KeyCorp declares $0.075 dividend (March 11)
- Previously: Morgan Stanley intends to declare $0.15 dividend (March 11)
- Previously: SunTrust Banks declares $0.24 dividend (March 11)
- C +3.4%, RF +3.8%, KEY +1.7%, MS +2.7%, STI +2.1%, BAC +0.6% premarket
Mar. 11, 2015, 5:36 PM
Mar. 11, 2015, 4:44 PM
- Morgan Stanley (NYSE:MS) intends to increase quarterly dividend by 50% to $0.15/share, beginning from 2Q15.
- The increased dividend represents annual yield of 1.72%
- The board plans to repurchase upto $3.1B of common stock beginning from 2Q15.
Mar. 11, 2015, 4:44 PM
- Goldman's Sachs' (NYSE:GS) first score of 5.8% was only marginally ahead of the 5% threshold, but the resubmitted capital plan came in at 6.4%
- Morgan Stanley (NYSE:MS) was 5.9% on both tests, so one wonders what changed. The company has announced a $3.1B buyback through the end of 2016 Q2 as well as a boost in the quarterly dividend to $0.15 per share from $0.10.
- JPMorgan (NYSE:JPM) lifted its score from a barely scraping by 5% to 5.5%.
- There's no word yet on the details of Goldman's or JPMorgan's plans.
- GS +0.9%, MS +1.8%, JPM +0.1% after hours.
- Previously: BofA must resubmit capital plan; Deutsche and Santander rejected (March 11)
- CCAR results
Mar. 10, 2015, 8:04 PM
- Spanish-language megabroadcaster Univision has tapped Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and Deutsche Bank (NYSE:DB) to lead its initial public offering, Reuters reports.
- Univision is currently owned by Univision Communications (owned by private-equity partners), and an IPO that could come in the second half could bring $1B and value the company at as much as $20B.
- The broadcaster was previously rumored to be a takeover target for the likes of CBS and Time Warner.
Mar. 6, 2015, 11:45 AM
- As rumored at the start of the year, Morgan Stanley's (MS +0.8%) infrastructure unit has agreed to the sale of the Montreal Gateway Terminals to a group led by Fiera Axium. Terms were not disclosed, but a figure in the area of $600M had been previously reported as a possibility.
- Morgan Stanley initially acquired an 80% interest in the facility in 2007, and secured 100% at the end of 2013.
- Previously: Report: Morgan Stanley agrees to sale of Montreal port terminals (Jan. 5)
Mar. 5, 2015, 8:28 PM
- The minimum Tier 1 common capital ratio for banks is 5%, according to the Fed, and here's how the 31 lenders stacked up under the central bank's severely adverse scenario vs. a year ago (h/t: WSJ):
- Deutshce Bank (NYSE:DB): 34.7%, not tested a year ago
- DIscover (NYSE:DFS): 13.9% vs. 13.2% a year ago
- Bank of New York Mellon (NYSE:BK): 12.6% vs. 13.1%
- American Express (NYSE:AXP): 12.5% vs. 12.1%
- Northern Trust (NASDAQ:NTRS): 12.3% vs. 11.7%
- State Street (NYSE:STT): 11.8% vs. 13.3%
- Citizens Financial (NYSE:CFG): 10.7% vs. 10.7%
- KeyCorp (NYSE:KEY): 9.9% vs. 9.2%
- Capital One (NYSE:COF): 9.5% vs. 7.8%
- PNC Financial (NYSE:PNC): 9.5% vs. 9%
- Santander Holdings USA (SAN's U.S. unit): 9.4% vs. 7.3%; shares +0.8% after hours
- BMO Financial (BMO's U.S. unit): 9% vs. 7.6%
- Comerica (NYSE:CMA): 9% vs. 8.6%
- Huntington Bancshares (NASDAQ:HBAN): 9% vs. 7.4%
- HSBC North America (NYSE:HSBC): 8.9% vs. 6.6%
- U.S. Bancorp (NYSE:USB): 8.5% vs. 8.2%
- Regions Financial (NYSE:RF): 8.3% vs. 8.9%
- Citigroup (NYSE:C): 8.2% vs. 7.2%
- SunTrust (NYSE:STI): 8.2% vs. 8.8%
- BB&T (NYSE:BBT): 8.1% vs. 8.4%
- MUFG Americas Holdings (NYSE:MTU): 8% vs. 8.1%
- Ally Financial (NYSE:ALLY): 7.9% vs. 6.3%
- Fifth Third Bancorp (NASDAQ:FITB): 7.9% vs. 8.4%
- Wells Fargo (NYSE:WFC): 7.5% vs. 8.2%
- M&T Bank (NYSE:MTB): 7.3% vs. 6.2%
- Bank of America (NYSE:BAC): 7.1% vs. 5.9%; shares +2.1% after hours
- JPMorgan (NYSE:JPM): 6.5% vs. 6.3%
- BBVA Compass (NYSE:BBVA): 6.3% vs. 8.5%
- Goldman Sachs (NYSE:GS): 6.3% vs. 6.9%
- Morgan Stanley (NYSE:MS): 6.2% vs. 6.1%
- Zions Bancorp (NASDAQ:ZION): 5.1% vs. 3.6%; shares -1.7% after hours
- The lenders were also informed today whether their capital return plans would put them below the Fed's 5% threshold, giving them a 6-day window with which to change those requests, if need be. Last year, both BofA and Goldman scaled back their dividend/buyback requests, allowing them to pass the CCAR. This year's CCAR results will be announced on Wednesday.
- 2015 Stress Test Methodology and Results
Mar. 5, 2015, 5:24 PM
- 2015 stands as the first year since the stress tests started in 2009 that all banks maintained necessary capital levels under the severe adverse scenario, though Zions Bancorp (NASDAQ:ZION) just squeaked by with a Tier 1 capital ratio of 5.1% vs. the 5% minimum. Citigroup's (NYSE:C) ratio of 8.2% easily passed.
- Another measure more relevant to those banks active in capital markets is total risk-based capital, and Goldman Sachs(NYSE:GS) at 8.1% and Morgan Stanley (NYSE:MS) at 8.6% were just north of the minimum 8% required.
- In aggregate, the 31 banks subject to the test showed capital ratios falling to 8.2% under the severe adverse scenario vs. 5.5% in 2009, and against the 5% minimum allowed.
- Previously: All 31 lenders pass the stress test (March 5)
- Stress Test 2015 Methodology and Results
- ZION -0.6%, GS -0.7%, MS -0.9%, C -0.55% after hours.
Mar. 2, 2015, 11:17 AM
- Last week, Morgan Stanely (MS +1.1%) cut a deal for $2.6B to settle a federal probe into pre-crisis mortgage activities, but the bank - in its 10-K - disclosed the New York Attorney General has informed it of a potential lawsuit relating to roughly 30 subprime MBS deals.
- Morgan has set aside $2.8B for legal costs from still-unresolved cases, Other potential suits could come from California, Virginia, and Illinois.
- Previously: Morgan Stanley removes overhang with mortgage settlement (Feb. 26)
Feb. 26, 2015, 1:33 PM
- "Most of the major legacy legal issues are now in the rearview mirror for Morgan Stanley (MS -1.2%)," says UBS analyst Brennan Hawken, following the bank's $2.6B mortgage settlement with the DOJ last night.
- He notes the bank isn't a rate-setter for Libor and its forex business is minor, so fines related to those probes should be small relative to what some peers are facing.
- The only major U.S. firm left to settle over mortgages is Goldman Sachs (GS -0.1%), and while the timing is unknown, it's probable Goldman's fine will be similar in magnitude to Morgan Stanley rather than the far larger penalties dealt to the money center banks.
- Previously: Morgan Stanley to settle DoJ civil probe for $2.6B (Feb. 25)
Morgan Stanley through its subsidiaries and affiliates, provides financial products and services to a diversified group of clients and customers, including corporations, governments, financial institutions and individuals.
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