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Bank of America Merrill Lynch Named Institutional Investor Magazine’s “Top Global Research Firm of 2013”Business Wire (Thu, 10:00AM)
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2014 Market Outlook: BofA Merrill Lynch Global Research Calls for U.S.-Led Red, White and Bull Market in Year AheadBusiness Wire (Tue, 11:30AM)
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Bank of America Corporation (together, with its consolidated subsidiaries, Bank of America, the Corporation, our company, we or us) is a Delaware corporation, a bank holding company and a financial holding company under the Gramm-Leach-Bliley Act. Our principal executive offices are located in... More
Tuesday, Sep 35:42 AMBofA selling remaining stake in CCB in deal worth up to $1.5B
Tuesday, Sep 35:42 AM| Comment!
- Bank of America (BAC) is reportedly selling its remaining stake in China Construction Bank Corp (CCB) at a discount.
- The U.S. company has offered 2B Hong-Kong traded shares at HK$5.63-$5.81 ($0.73-0.75) each, up to 5.1% below today's close of HK$5.93.
- At the offered price, BofA would generate HK$11.26-11.62B ($1.45-1.5B) vs HK$11.86B if the bank sold the shares at HK$5.93.
Tuesday, Sep 34:25 AMVerizon looks to raise $61B bridge loan to help fund $130B deal
Tuesday, Sep 34:25 AM| 1 Comment
- Verizon Communications (VZ) has reportedly started syndicating a $61B one-year bridge loan that will support the company's $130B acquisition of 45% of Verizon Wireless from Vodafone.
- Verizon intends to help pay for the deal with $49B in bonds and $14B in other debt, but might need the bridge loan if it can't issue the bonds by the time the transaction closes, which is expected in Q1 2014. The $63B in funding will replace the bridge loan.
- JP Morgan (JPM), Morgan Stanley (MS), Bank of America (BAC) and Barclays (BCS) are leading the financing and underwriting the deal.
- Meanwhile, Verizon has no plans to enter the Canadian market. The carrier had been linked with a couple of struggling wireless start-ups. The news should be positive for Canada's three largest telecom operators - BCE (BCE), Rogers Communications (RCI) and Telus (TU) - whose shares tumbled in response to Verizon's expansion plans in Canada and then climbed on initial reports of the Vodafone deal.
Friday, Aug 3012:07 PMMortgage slowdown to cost 1K Bank of America workers their jobs
Friday, Aug 3012:07 PM| 1 Comment
- The move in BofA's (BAC -0.3%) Beachwood, Ohio office comes as the mortgage refinance boom goes into reverse, and as the bank continues with its focus on cutting costs (aiming at 30K job cuts total, $8B in savings annually by 2015).
- Refinances nationwide made up 70-75% of home loans last year and have dropped to 60-65% this year, according to Freddie Mac. They're expected to fall to less than 50% next year.
- Most of those being fired worked in mortgage refinancing, while the rest are in customer service for consumer banking.
- Bank of America employs around 170K.
Wednesday, Aug 2811:41 AMZero down mortgages preserved in new rule
Wednesday, Aug 2811:41 AM| 21 Comments
- Maybe a victory for prospective homeowners, but certainly a victory for anyone dependent upon a speedy housing market, the new proposal for the Qualified Residential Mortgage rule (QRM) is quite a bit less-restrictive than the original version.
- The new standard would allow a no downpayment option similar to that allowed by the CFPB - that rule protects banks from being sued by mortgage investors on zero-down loans as long as the borrower's debt to income ratio is less than 43%.
- The new plan also requires banks to hold onto a slice of mortgages (for those with less than 20% down) when debt/income is above 43% as opposed to 36% in the initial proposal.
- The agencies will await public comment before a vote on the final rule.
- Homebuilders, mortgage bankers, and realtors look on with interest.
- Related: WFC, BAC, C, JPM, XHB, ITB, RLGY.
Wednesday, Aug 284:10 AMLegal costs for major U.S. banks top $100B
Wednesday, Aug 284:10 AM| 12 Comments
- The U.S.'s six largest banks have accumulated legal costs of $103B so far since the financial crisis, Bloomberg calculates, noting that the figure is greater than the amount they've paid in dividends in the past five years.
- Legal fees and litigation costs account for $56B and the rest is for payments to mortgage investors.
- JPMorgan's (JPM) legal bill is $21.3B while it has allocated $8.1B for mortgage buybacks. Bank of America's (BAC) legal expenses are $19.1B and its repurchase provisions $28.6B. The other banks are Citigroup (C), Wells Fargo (WFC), Goldman (GS) and Morgan Stanley (MS).
Wednesday, Aug 283:47 AMBofA to pay $160M in racial discrimination case
Wednesday, Aug 283:47 AM| 6 Comments
- Bank of America (BAC) has agreed to pay $160M to settle a lawsuit brought by black financial advisers, who accused the bank of not giving them the same opportunities as white staff in investment teams and account distribution.
- The first lawsuit was filed in 2005 on behalf of Nashville-based George McReynolds, who still works for the bank, and grew into one that encompassed the claims of hundreds of others.
Tuesday, Aug 272:55 PMFHFA wants $6B from JPMorgan to settle MBS claims
Tuesday, Aug 272:55 PM| 7 Comments
- UBS last month agreed to a precedent-setting $885M settlement, or more than 90% of expected losses on MBS it packaged. The notional value of paper sold by JPMorgan (JPM) is 5x larger than that of UBS, leading to a figure close to the $6B range. JPMorgan - negotiating for a lower amount - says claims against other banks allege fraud, making their offenses more serious.
- $6B would be the high-end of what JPMorgan last year figured was its liability in the case (the suit is over $33B in MBS). The House of Dimon could await its day in court, but nearly all initial rulings have gone against the banks thus far. A settlement before the summer 2014 trial date still looks probable.
- Watching closely will be Bank of America (BAC) and RBS, both of which have heavy exposure to the FHFA suits and have yet to settle. Morgan Stanley estimates a worst-case scenario of $3.6B for BofA vs. a base case of $2B.
Monday, Aug 2610:27 AMBofA's legacy servicing costs are dropping fast
Monday, Aug 2610:27 AM| Comment!
- Wow. Bank of America's (BAC +0.4%) Legacy Asset Servicing costs are expected to drop to a normalized run rate of $500M per quarter by the end of 2015, says KBW's Chris Mutascio after a meeting with the bank's CFO Bruce Thompson. This compares to $2.3B in Q2 of this year. Annually, this is $7.2B in savings over the next 2 years and beyond (mostly by way of layoffs as the beefed-up staff hired to deal with non-performing mortgages is cut).
- For this year, management now expects LAS costs to fall to $2B in Q4. This is below the $2.1B guidance given during the Q2 earnings call (transcript).
- Mutascio doesn't have an EPS estimate beyond 2014 ($1.38), but the LAS savings represent a $0.17-$0.25 benefit, he says. He currently rates the shares a Hold with $15 price target.
Sunday, Aug 252:45 AMStock exchanges in merger talks
Sunday, Aug 252:45 AM| 2 Comments
- BATS Global Markets (BATS) is reportedly in advanced negotiations to merge with Direct Edge Holdings in an all-stock deal that would create the second-largest exchange operator in the U.S. in terms of shares traded, putting it behind the NYSE (NYX) but ahead of Nasdaq (NDAQ).
- BATS CEO Joseph Ratterman is expected to become the head of the new firm, while Direct Edge boss William O'Brien would become president. The companies plan to continue operating all four of their U.S. stock-exchange platforms after the merger.
- Both firms are profitable, with BATS earning EBITDA of $101M in 2012.
- Direct Edge's owners include KCG Holdings (KCG), Goldman Sachs (GS), Citadel and the International Securities Exchange. Those of BATS include KCG also, as well as Bank of America (BAC), Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), JPMorgan (JPM) and Morgan Stanley (MS).
Thursday, Aug 224:35 PMMoody's puts major U.S. banks on review
Thursday, Aug 224:35 PM| 7 Comments
- Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS), and Wells Fargo (WFC) are on review for downgrade as the agency considers reducing its assumption for how much government support they're likely to get.
- Bank of America (BAC) and Citigroup (C) are also on review, but for "direction uncertain" as Moody's considers what may be more than offsetting improvements in their standalone credit strength.
- Mellon Bank (BK) and State Street (STT) - whose ratings are already under the scope - will also be included in this new review.
- Moody's telegraphed its intention to undertake this move back in March.
- All of the above stocks are off marginally in AH trade.
- Source: Moody's.
Thursday, Aug 229:43 AMBofA estimates lifted at Credit Suisse
Thursday, Aug 229:43 AM| 8 Comments
- Though maintaining their Hold rating on the stock, Credit Suisse's Orenbuch and Glaser lift their price target on BAC by $1 to $14 as they expect cost savings are set to come in faster than expectations.
- The bank has made good on about 55% of the savings hoped for with its New BAC program, but the mortgage business should offer additional leverage for cuts.
- While the savings are enough for the team to lift its 2013-2015 EPS estimates and current price target, it will take meaningful revenue growth before they can get more positive on the stock (unfortunately markets anticipate - it will probably be at $18 by the time BofA rates a Buy).
- 2013 EPS is now estimated at $1.05 vs. $0.99 previously, 2014 at $1.40 vs. $1.30, 2015 at $1.55 vs. $1.45.
Wednesday, Aug 216:30 PMGoldman Sachs: the 50 stocks most shorted, most hated by hedge funds
Wednesday, Aug 216:30 PM| 15 Comments
- Mom-and-pop investors like to see where the "smart money" is going, but Goldman Sachs finds the 50 stocks (with market caps over $1B) that hedge funds are heavily shorting have averaged a 30% gain YTD.
- Top 10 most shorted, based on the number of funds owning the stock: EQIX, LCC, HLF, RDN, BBRY, WNR, VVUS, PHH, DECK, OUTR.
- Top 10 best loved, based on the same criteria: GOOG, AAPL, AIG, C, GM, JPM, BAC, MSFT, QCOM, PFE.
- Complete lists: the 50 most shorted; the 50 best loved.
- Earlier: picks from Goldman's Hedge Fund Monitor.
Wednesday, Aug 2112:28 PMBacklash over bank profits in Brazil muni market
Wednesday, Aug 2112:28 PM| 1 Comment
- Brazil's nascent municipal bond market is brought to a standstill as the government is unhappy with big profits collected by Credit Suisse (CS) and Bank of America (BAC) for underwriting deals.
- Credit Suisse loaned $1.27B to the state of Minas Gerais in February and then sold the debt to investors at a 9.2% markup. Bank of America made 3.6% by selling off a $662M loan to Maranahao last month.
- The government wants a piece of that action and is considering banning the securitization of new loans and a cap on interest rates.
- "These states paid a premium for their lack of experience in international markets,” says a bank fixed income trader. “Investment banks can justify that premium because they’re forming a secondary market for these where none existed before.”
Wednesday, Aug 2110:56 AMBank of America ending drive-up service in some spots
Wednesday, Aug 2110:56 AM| 2 Comments
- Penny-wise, pound-foolish? "Charlotte is a car town, just like Atlanta," says one banking analyst of two cities seeing closures. "People are used to doing business from their cars."
- Bank of America's (BAC) moves comes at the same time it's closing/selling branches and ATMs as Project BAC looks for $8B in savings by the middle of 2015.
- The closures also take place as the banking industry is trying to adapt to new consumer behavior, especially the rise in online and mobile banking, not to mention new "Teller Assist" ATMs which allow interaction with live tellers stationed in far-away call centers.
Wednesday, Aug 218:47 AMNygren: Buyback stocks cheaper than dividend payers
Wednesday, Aug 218:47 AM| 8 Comments
- Investors have been overpaying for dividend stocks while undervaluing those firms buying back shares, Oakmark's Bill Nygren tells the crew at Fast Money. Investors should treat both the same, but the stocks of repurchasers aren't as expensive, he says.
- Previous: Buyback ETFs outpacing market and dividend funds.
- Among his favorite picks are Bank of America (BAC) and JPMorgan (JPM). "What we see here is really low P/Es relative to the market and relative to their own history ... These companies sell at about 8x the level that we think they'll earn after the legacy mortgage costs stop going through the income statement."
- Other top picks are Apache (APA) - selling assets for close to full value and buying back shares - Haliburton (HAL) - which has tendered to repurchase 4-5% of its shares - and DirecTV (DTV) - also buying back stock.
- Buyback ETFs: PKW, TTFS.
- Dividend ETFs: FDL, FVD, MDIV, QDF, QDYN, QDEF, DIV, CVY, DVY, HDV, IYLD, PEY, PFM, SCHD, SDY, SDYL, DVYL, VYM, DHS, DTD, SYLD, KBWD, SPHD, DLN, DON, HILO.
Wednesday, Aug 213:44 AMBanks' hiring of well-connected relatives in China widespread
Wednesday, Aug 213:44 AM| 9 Comments
- While the SEC is only now investigating JPMorgan (JPM) for possibly hiring the children of influential officials in China to win business, the recruitment by major banks of well-connected relatives has been going on for over a decade.
- Goldman Sachs (GS) once employed the grandson of former Chinese President Jiang Zemin and Credit Suisse (CS) the daughter of ex-Prime Minister Wen Jiabao. In 2006, the son-in-law of of a politburo member helped Merrill Lynch (BAC) win a deal to work on the $22B IPO of state-owned bank ICBC.
- While some of the recruits work hard, others barely make it to the office. Still, regulators might find it difficult to prove a direct connection between an appointment and the obtaining of a contract.