Dec. 5, 2014, 10:06 AM
- Among those counting on higher interest rates to boost profits are banks, insurers, and online brokers, and all are outliers to the upside in today's session after a strong November jobs report has rate hike expectations on the rise. The XLF is up 1%.
- TBTFs: Bank of America (BAC +2.1%), Citigroup (C +1.8%), JPMorgan (JPM +2.2%), Wells Fargo (WFC +1.2%)
- Regionals (KRE +1.9%): Regions Financial (RF +2.6%), KeyCorp (KEY +2.3%), Huntington (HBAN +1.5%), BB&T (BBT +1.6%), Zions (ZION +4%)
- Custodials: BNY Mellon (BNY), State Street (STT +1.6%), Northern Trust (NTRS +1.8%)
- Life insurers: MetLife (MET +2.1%), Prudential (PRU +2.5%), Lincoln National (LNC +2.3%)
- Online brokers: Schwab (SCHW +3.8%), E*Trade (ETFC +3%), Ameritrade (AMTD +2.7%)
- Previously: Short end of yield curve on the move after jobs number (Dec. 5, 2014)
- Previously: Bonds and dollar higher, gold slumps after strong jobs report (Dec. 5, 2014)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Dec. 2, 2014, 3:42 PM
- "Our concern is that the market has become complacent on the setting of the SIFI surcharge for the mega banks, which means there may be surprise at just how onerous the surcharge could be for JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS)," writes Guggenheim's Jaret Seiberg.
- The Fed is expected to announce the capital surcharge on December 9.
- Previously: U.S. banks to be hit with tougher capital rule
Dec. 1, 2014, 11:40 AM
- A positive macro outlook for the U.S. (especially compared to the rest of the globe) should boost credit demand, says UBS - upgrading U.S. financials (NYSEARCA:XLF) to Overweight - while the start of a new rate-hike cycle next year bodes well for interest margins.
- UBS's three favored U.S. banks are Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Morgan Stanley (NYSE:MS), but TD Bank (NYSE:TD) also makes the buy list thanks to its large American presence.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
Nov. 29, 2014, 8:00 AM
- New guidelines - set to take full effect on December 1 - are the result of an agreement reached last month between banks and the GSEs meant to clarify exactly when lenders could be called to task for mortgages sold to Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) which ultimately default. Since the financial crisis, Fannie and Freddie have forced banks to repurchase billions of dollars worth of mortgages, leaving them naturally gun-shy about making new loans to all but the most pristine of credits.
- “It’s providing greater certainty for all the parties so that you can lend more confidently and make the whole judgment process much easier and more clear cut,” says Mike Heid, president of Wells Fargo (NYSE:WFC) Home Mortgage. Along with SunTrust (NYSE:STI), Wells says borrowers should begin to see initial changes - such as faster processing times, reduced credit score requirements, and greater leeway to those whose credit history suffered due to one-time events - in a few weeks.
- "We will be able to be looser and open up the net wider," says Mason-McDuffie Mortgage CEO Bill Godfrey, now expecting to make loans down to a 620 credit score from 660 previously.
- Not everyone agrees: “Unless we are convinced that the rules are going to be permanent and there is not going to be a look back or a reach back in future times…we are simply going to stay on the sidelines," U.S. Bancorp (NYSE:USB) boss Richard Davis has said, and Bank of America (NYSE:BAC) CEO Brian Moynihan made similar comments at a recent conference.
Nov. 26, 2014, 11:50 AM
- At issue was a SEC case against Bank of America (NYSE:BAC) mostly for mortgage-related wrongdoing by Merrill Lynch and Countrywide before the bank purchased the two. In this case, BofA will disgorge $109.2M in profit, $6.62M in interest, and pay a civil penalty of $109.2M.
- The clearing of this case will allow the $16.7B global mortgage settlement to move forward.
Nov. 17, 2014, 11:05 AM
- The two cases both come from Florida and involve so-called "stripping off," where a homeowner in a Chapter 7 bankruptcy filing can void second mortgage debt when the first mortgage is greater than a home's value.
- An appeals court allowed the practice, but Bank of America (NYSE:BAC) says the approach taken by the court is different than that of other appeals courts around the country and thousands of pending cases could be affected.
Nov. 13, 2014, 10:17 AM
- Real sweethearts if you believe the reports, the likes of JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Synchrony Financial (NYSE:SYF) are being investigated by the Feds for still going after borrowers after their debt has been legally discharged in a bankruptcy.
- Paying little attention to such court-ordered discharges, the banks reportedly are keeping the debt alive on credit reports, more or less attempting to force borrowers to pay on bills which they no longer owe.
- The issue, say sources, is the way banks report to credit agencies. Once a debt is voided through bankruptcy, creditors must update credit reports showing that debt is cleared. Banks, however, routinely fail to do so, instead leaving notations of "past due" or "charged off." A clerical mistake would be one thing, but, according to a number of bankruptcy judges,, banks refuse to make corrections unless the borrower pays.
- The banks contend they are complying with all federal laws in their collection and sale of debt. Class-action suits have also been filed and the banks are trying to have them thrown out, arguing its third-party debt buyers who are in control.
Nov. 12, 2014, 1:02 PM
- The FHFA wants to ease lending standards - allowing down payments of as little as 3% - but Bank of America (NYSE:BAC) won't be playing along, says CEO Brian Moynihan, speaking at a BAML conference.
- Webcast replay
- "I don't think there's a big incentive for us to start to try to create more mortgage availability where the customers are susceptible to default," he says, and those who can't come up with at least a 10% down payment should probably consider remaining as renters. "You won't see us start to expand our criteria much past what we've done today."
- Given the shell-shock from the unceasing legal assault and put-back demands, can BofA or any other lender be blamed?
Nov. 12, 2014, 10:32 AM
- In what appears to be in addition to the already-announced global $3.4B fine for banks over forex manipulation, the OCC announces $950M in penalties against Bank of America (BAC -0.6%), JPMorgan (JPM -1.1%), and Citigroup (C -0.7%) for "unsafe or unsound" practices related to their forex trading operations.
- BofA will pay $250M, JPM $350M, and Citi $350M.
- Previously: Global banks fined $3.4B in forex probe
Nov. 12, 2014, 2:24 AM
- Global regulators have fined six major banks, including UBS (NYSE:UBS), HSBC (NYSE:HSBC), Citigroup (NYSE:C), Royal Bank of Scotland (NYSE:RBS), JPMorgan (NYSE:JPM) and BofA (NYSE:BAC), a total of $4.3B over allegations of price fixing and manipulating benchmarks in the $5T-a-day foreign exchange market.
- The penalties were imposed by Britain's Financial Services Authority, the U.S. Commodity Futures Trading Commission and Swiss regulator FINMA.
- Barclays (NYSE:BCS) had been expected to be part of the settlement but the FCA said its investigation into the U.K. bank was continuing.
Nov. 10, 2014, 4:13 PM
- David Sobotka, Bank of America's (NYSE:BAC) global head of fixed income, currencies, and commodities trading will exit by year's end, reports the WSJ, citing an internal memo. He was named co-head of FICC trading in 2011 and took on the role by himself a little more than a year ago.
- Slow FICC business has been a sore point for the major banks for more than a year now, but the declines were never as deep at BofA as they were for some competitors, and FICC revenue at the bank rose 11% to $2.25B in Q3. Among the reasons for Sobotka's exit, says a source, is his comfort with that speedier-than-expected rebound.
Nov. 6, 2014, 5:13 PM
- Owing to the now fast-moving probes over foreign exchange manipulation, Bank of America (NYSE:BAC) is recording a $400M Q3 pretax charge, thus cutting its previously stated $70M quarterly loss to a $232M or $0.04 share loss. Even with GAAP losses in two out of the last four quarters, BofA earned about $4.7B over the 12 months ending September 30.
- Source: Press Release
- Shares -0.6% after-hours
Oct. 27, 2014, 12:03 PM
- The $16.7B settlement supposedly agreed to in August is being held up by two Democratic SEC commissioners over waiving additional sanctions set to kick in when the deal is entered in court. The two Republican commissioners are fine with the waivers, and the swing vote - SEC Chair Mary Jo White - isn't participating due to a conflict.
- At issue is political pressure that lawmakers have been too soft on Wall Street. Banks typically seek - and are granted - three key waivers when settling cases, with the most important one being a ban on managing mutual funds. For Bank of America (BAC -1.1%), the key waiver would allow it to continue seeking investors for private firms like tech companies which haven't yet gone public.
- The waivers are often one of the reasons financial firms decide to settle cases rather than go to trial. “The commission and its staff should not be in the business of rubber-stamping and approving all waiver applications simply because a request is made,” says Commissioner Luis Aguilar, one of the two who are holding the settlement up.
Oct. 23, 2014, 6:01 PM
Oct. 23, 2014, 4:49 PM
- Not having had the pleasure of being subject to the stress test and CCAR previously, Deutsche Bank's (NYSE:DB) U.S. unit will be a participant next year
- As in prior years, those BHCs with large trading operations - BAC, C, GS, JPM, MS, WFC - will be required to factor in a global market shock as part of their scenarios.
- Those six, plus STT and BK - thanks to their custodial operations - will be required to incorporate a counterparty default scenario.
- Among the items in the severely adverse scenario is the unemployment rate jumping to 10%, a 60% dive in the stock market, and oil jumping to $110 per barrel (how about oil falling to $10 per barrel?).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KCE, KRU, KBWR, RWW, RYF, KBWC, FINZ, KRS
Oct. 22, 2014, 10:32 AM
- The MBA index rose 11.6% for the week ended October 17, the largest gain since January as mortgage rates continued to decline - the average 30-year fixed mortgage coming in at 4.1%, the lowest since May 2013.
- Leading the way were refinancings, with that gauge jumping 23.3%, the biggest move since January 2012 (purchase applications fell 4.6%).
- Should the trend continue, the now-lean mortgage operations at places like Wells Fargo (WFC +0.2%), JPMorgan (JPM +0.2%), and Bank of America (BAC +0.2%), among others, should provide a nice boost to Q4 results.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, FINZ, KRS
BAC vs. ETF Alternatives
Bank of America Corporation is a bank holding and a financial holding company. Through its subsidiaries, it provides banking and non-banking financial services and products throughout the United States and in selected international markets.
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