Fri, Apr. 24, 10:03 AM
- FBR downgrades Capital One (COF -1.7%) to Market Perform from Outperform, with the price target lowered to $87 from $94.
- FBR didn't participate in the earnings call (transcript) last night, but one item of interest is CapOne's growing caution on auto lending. Management saw increasingly aggressive underwriting practices by some competitors in Q1, particularly in subprime, and CapOne losing a bit of business as a result.
- Also on the worry list are the historically high used-car values. A decline would pressure results, but management says lower prices are assumed during underwriting and isn't too concerned about the impact.
- Previously: More on Capital One's mixed results (April 23)
Thu, Apr. 23, 4:34 PM
- Q1 net income of $1.2B or $2.00 per share vs. $1.2B and $1.96 one year ago. Stock float of 557.2M shares down from 580.3M.
- Net interest income of $4.576B down 5% Y/Y. Net interest margin of 6.57% down five basis points. Noninterest income of $1.071B up 5%.
- Provision for credit losses of $935M up 27%.
- Marketing expense of $375M up 15%. Total operating expenses of $2.557B up 5%.
- Domestic Card period-end loans of $74.1B down 5%.
- Consumer Banking period-end loans of $71.4 down marginally. Auto period-end loans of $38.9B up 3%. Home period-end loans of $28.9B down 4%.
- Conference call at 5 ET
- Previously: Capital One Financial beats by $0.12, misses on revenue (April 23)
- COF flat after hours
Thu, Apr. 23, 4:17 PM
Wed, Apr. 22, 5:35 PM
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Tue, Apr. 21, 9:07 AM
- Beginning today, Quicksilver cardholders will receive 20% back on all Uber rides through April 2016 when they pay using their Quicksilver or QuicksilverOne card, Also - for a limited time - eligible Capital One (NYSE:COF) cardholders who are new to the service will receive their first two rides free.
- Source: Press release
Wed, Apr. 8, 11:47 AM
- Picking winners in banking names is tough right now, says Nomura, as correlation between names has risen to 90% this year from 60% in 2014. When the headwind from ZIRP turns into a tailwind from rising rates is anybody's guess, but Nomura figures the market will still reward those who deliver strong performance in areas they can control, like fee income and efficiency.
- In credit cards, the team sees relative value in Discover (DFS +0.7%), noting it trades at a lower premium to Capital One (COF +1.2%) than has been typical in the past. "Discover’s excess capital (9% of its market cap) and the optionality associated with having its own network lead us to believe that it is likely to regain its premium."
- For banks, Nomura is cautious as recent data suggests loan growth has not been enough to offset margin compression. If you've got to own them, PNC Financial (PNC), U.S. Bancorp (USB +0.3%), and Wells Fargo (WFC +0.1%) are favorites.
Wed, Apr. 8, 7:36 AM
- Citing Capital One's (NYSE:COF) strong card loan growth, capital return, and reasonable valuation, Citi keeps a Buy rating on the stock and $95 price target. Continuing to see a "modestly" improving U.S. consumer, Citi also has Buy ratings on AmEx (NYSE:AXP), Discover (NYSE:DFS), MasterCard (NYSE:MA), Synchrony Financial (NYSE:SYF), and Visa (NYSE:V).
Wed, Apr. 1, 4:33 PM
- Looking for some kind of growth wherever they can find it, banks are about to get their wish as Fair Isaac is set to launch a new credit scoring metric which should expand by tens of millions the field of those eligible to get credit.
- The new score will pull payment histories for things like utilities to calculate credit scores for consumers who might otherwise not have one. Other things - like how often someone changes address - will be used to help calculate a score.
- FICO and 10 unnamed credit card issuers have been testing the new score since November, and Fair Isaac intends to roll things out nationwide by year-end. Right now, about 15M of the 53M previously unscorable Americans can be scored using the new system.
- Source: WSJ
- Among those of interest: WFC, C, BAC, JPM, COF, DFS, AXP
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
Mon, Mar. 23, 12:29 PM
- The Regional Bank Coalition is urging D.C. to remove the $50B threshold at which, under current Dodd-Frank rules, lenders are subject to boosted regulatory standards.
- The fight thus far has centered on whether to raise that bar (something even the Fed appears to support) or scrap it altogether.
- "Regional banks do not create systemic exposure through market making or complex networks of interconnected transactions with other financial firms," says the group.
- Regional Bank Coalition website
- The group: SunTrust (NYSE:STI), Regions Financial (NYSE:RF), Huntington Bancshares (NASDAQ:HBAN), Fifth Third (NASDAQ:FITB), Capital One (NYSE:COF), BMO Financial (NYSE:BMO), Compass (NYSE:BBVA), BB&T (NYSE:BBT), Bank of the West, and AmEx (NYSE:AXP).
- ETFs: KRE, KBE, IAT, KBWB, QABA, KRU, KBWR, KRS
Wed, Mar. 11, 5:58 PM
Thu, Mar. 5, 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
Wed, Mar. 4, 11:07 AM
- The current balance of E*Trade's (NASDAQ:ETFC) home-loan portfolio is only $6B now vs. $27B as the financial crisis began to unfold, and regulators are no longer requiring the parent company to set aside capital to support the lending unit.
- There's still risk as a buyer would have to mark the loans to market, and there's currently a wide gap between carrying value and market value. "As that [gap] goes down, I would think a buyer would be more and more interested," says Compass Point's Michael Tarkan..
- TD Ameritrade (AMTD -0.5%) and Schwab (SCHW -0.9%) seem like natural potential buyers, but lenders like CIT Group (CIT -0.8%) and Capital One (COF -0.8%) might also have interest, says Sandler O'Neill's Rich Repetto. Goldman Sachs has been rumored to have sniffed around the company as well.
Mon, Mar. 2, 8:30 AM
- One of this country's largest participants in the bubbly subprime auto lending market, Wells Fargo (NYSE:WFC), reports the NYT, for the first time is imposing a cap on the amount of subprime loans it will offer - no more than 10% of overall auto loan originations, which last year was about $30B.
- The move could have big effect as Wells Fargo - having sidestepped the worst of the mortgage mess - has earned a reputation for knowing something about managing risk.
- The cap is already being felt across the auto market, and dealers are noting the bank increasingly rejecting loans which previously might have been accepted.
- Capital One (NYSE:COF), Santander Consumer (NYSE:SC), Ally Financial (NYSE:ALLY) ... ball's in your court now.
- Previously: Ally mulling return to mortgages, credit cards (Feb. 20)
Fri, Feb. 20, 3:10 AM
- Santander (NYSE:SAN) has agreed to switch the way it screens applicants for checking and savings accounts, joining Citi (NYSE:C) and Capital One (NYSE:COF) which have already reached such a pact with New York Attorney General Eric Schneiderman.
- The accord comes amid concerns that the current screening process (through consumer-reporting agency ChexSystems) makes it harder for lower-income customers to open accounts, forcing them to rely on high-cost alternatives like check-cashing outlets.
- Schneiderman also has been looking into JPMorgan (NYSE:JPM) over its use of customer-screening databases, sources told Reuters.
- Previously: Citibank settles with NY over checking account screenings (Jan. 28 2015)
Fri, Feb. 13, 1:05 PM
- Banks are getting the worse end of the deal in co-branding partnerships with major retailers, say banking officials.
- Margins have shrunk on co-branded programs for major card issuers and processors such as Capital One (NYSE:COF), Wells Fargo (NYSE:WFC), American Express (NYSE:AXP), Visa (NYSE:V), and MasterCard (NYSE:MA) with retailers playing banks off against one another in order to score better terms.
- Earlier this week, American Express announced it would end its co-branded card with Costco.
Thu, Feb. 12, 2:43 PM
- "We wouldn’t be surprised to see a winner announced very soon and we’d imagine it is competitive," says Citigroup's Donald Fandetti, putting Capital One (COF +2.8%) high on the list as a possible winner
- As for American Express (AXP -6.4%), Fandetti say's today's big decline pretty much prices in the earnings hit from losing Costco exclusivity. Even with another possible negative catalyst out there - the DOJ anti-competition suit - Fandetti reiterates his Buy rating on the stock. It's CapOne, however, that remains his team's Top Card Pick for 2015.
- Previously: AmEx down 6% on scrapping of Costco exclusivity (Feb. 12)
- Previously: AmEx and Costco ending U.S. partnership next year (Feb. 12)
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