Mon, Apr. 27, 8:36 AM
Tue, Apr. 21, 4:18 PM
- Q1 net income of $586M or $1.28 per share vs. $631M and $1.31 one year ago. ROE of 21%.
- Total loans of $67.6B up 5.9% Y/Y. Credit card loans of $53.5B up 5.1%. Net charge-off rate for credit card loans of 2.40% up eight basis points.
- Direct Banking pretax income of $881M off 11% Y/Y, thanks to provisions for loan losses of $388M vs.$270M a year ago. Higher provisions are a result of faster growth in loans. Net interest income up 4%. Net interest margin of 9.70% off 18 basis points. Delinquency rate for credit card loans over 30 days past due of 1.64% down eight basis points. Expenses of $93M up 13%, partly thanks to professional fee expense associated with anti-money laundering programs.
- Payment Services pretax income of $27M off $1M Y/Y.
- About 6M shares repurchased during quarter for $360M, reducing the float by 1%.
- Conference call at 5 ET
- Previously: Discover Financial Services beats by $0.01, revenue in-line (April 21)
- DFS -0.5% after hours
Tue, Apr. 21, 4:07 PM| Comment!
Mon, Apr. 20, 5:35 PM
Thu, Apr. 16, 5:22 PM| 4 Comments
Wed, Apr. 15, 10:11 AM
- Starting today, Discover (NYSE:DFS) cardholders will be able to temporarily turn off their accounts - stopping transactions when cards are lost or stolen.
- The new feature is for those times when a customer is nearly certain they know where they left their card - whether under a couch cushion or at a restaurant - and just want a temporary freeze until they find it, rather than canceling the account.
- Source: Marketwatch
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
Wed, Mar. 11, 4:59 PM| 2 Comments
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, Jan. 28, 8:05 AM
- The two have had nice runs over the longer-term, but have struggled in 2015, with Discover (NYSE:DFS) lower by about 15%, and Cap One (NYSE:COF) by 6%.
- Guggenheim cuts both from Buy to Neutral, and both are lower by 0.25% premarket.
- Previously: Financials go on sale in January (Jan. 24)
- Previously: Analysts weigh in as Discover tumbles post-earnings (Jan. 22)
- Previously: Capital One slips after bottom line miss (Jan. 22)
Sat, Jan. 24, 4:48 PM
- The financial sector is off to a worse start to the year than even the energy names, with the XLF down 3.9% YTD vs. the XLE's 3.2% decline. The S&P 500 is roughly flat. The SPDR KBW Bank ETF (NYSEARCA:KBE) is off 7.5%, and the Regional Bank ETF (NYSEARCA:KRE) is lower by 6.9%.
- Q4 earnings results haven't been wonderful, but financial names had been savaged well before those reports started coming out. Instead there's a difficult regulatory regime that won't quit, and - for now - it's looking like "wait'll next year" for the rising interest rates that were supposed to drive profit margins higher. The 10-year/2-year spread - already pretty low at 150 basis points to start the year - has narrowed to 137 bps.
- A partial roll call of banks: Bank of America (NYSE:BAC) -12.1% YTD, Citigroup (NYSE:C) -10.1%, JPMorgan (NYSE:JPM) -9.4%, Morgan Stanley (NYSE:MS) -9.4%, Regions Financial (NYSE:RF) -14.7%, KeyCorp (NYSE:KEY) -4.5%, PNC Financial (NYSE:PNC) -5.4%, Bank of New York (NYSE:BK) -9.1%, Capital One (NYSE:COF) -6%, Discover (NYSE:DFS) -13.6%.
- Other spread-starved sector names: MetLife (NYSE:MET) -9.8%, AIG (NYSE:AIG) -8%, Prudential (NYSE:PRU) -10.8%, Schwab (NYSE:SCHW) -9.9%.
- Some of what's working in financials: Blackstone (NYSE:BX) +6.7%, E*Trade (NASDAQ:ETFC) +1.2%, WisdomTree (NASDAQ:WETF) +12.3%, Legg Mason +2.8%.
Thu, Jan. 22, 9:52 AM
- "Guidance stated the revenue margin will likely be modestly down due to NIM compression, lower protection products revenue, higher rewards rate and lower payments volume," says Credit Suisse, cutting its price target to $71 from $74, and its earnings estimates. "NIM is expected to be down in 2015 due primarily to higher funding costs."
- The team now sees 2015 EPS at $5.40 vs. $5.60 previously, and 2016 at $5.75 from $5.95.
- Nomura maintains its Buy rating, but cuts the price target to $68 from $75, with analyst Bill Carcache believing the company may have kitchen-sinked this quarter by pulling forward much of its 2015 reserve building.
- Buy the dip, says RBC Capital, boosting its price target to $72 and keeping the stock as a Top Pick.
- DFS -7.5%
- Previously: Discover -3.8% as results come up short (Jan. 21)
Wed, Jan. 21, 4:24 PM
- Q4 net income of $404M or $0.87 per share vs. $553M of $1.19 (as adjusted) one year ago.
- Total loans of $70B up 6.4% Y/Y. Credit card loans of $56.1B up 5.6%. Net charge-off rate of 2.26% up 17 basis points. Payment services transaction dollar volume of $51B up 2%.
- Direct Banking segment pretax income of $646M off 29% Y/Y thanks mostly to a one-time $178M charge related to the elimination of the credit cards rewards forfeiture reserve. Net interest income up 7% Y/Y, with NIM of 9.77% down 5 basis points.
- Payment Services segment pretax income of $2M vs. $24M a year ago, mostly due to a $21M fair value adjustment from classifying Diners Club Italy as held-for-sale. Dollar volume of $51 up 2% Y/Y.
- 6M shares repurchased during quarter for $400M, cutting float by 1%.
- Conference call at 5 ET
- Previously: Discover Financial Services misses by $0.11, misses on revenue (Jan. 21)
- DFS -3.8% after hours
Wed, Jan. 21, 4:06 PM| Comment!
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