Wed, Feb. 25, 12:08 PM
- "We didn't find the argument overly convincing," say MKM Partners' David Trone and Pankaj Chitrakar, commenting on JPMorgan's (JPM +0.5%) investor day presentations yesterday at which management insisted a break-up of the bank isn't advisable.
- "We view this is a symbolic step in the process whereby pressure from the Street builds and management eventually relents," says the duo. "It is only natural that management would be in denial at this junction," particularly so soon after the Bear Stearns and WAMU purchases.
- Calling yesterday's investor day "one of the best in recent years," Deutsche's Matt O'Connor says management did a good job of keeping things simple: 1) Build and maintain leading client franchises across all businesses when many peers are pulling back; 2) Operate with "fortress" principles; 3) Maximize shareholder value via significant operating leverage and capital returns.
- O'Connor notes management's 15% ROTCE target (some had feared a cut to 14% or lower).
- Previous investor day coverage
Tue, Feb. 24, 3:50 PM
- No Goldman analyst is going to force JPMorgan (JPM +2.7%) out of investment banking, says Jamie Dimon, wrapping up his bank's investor day. Dimon is referring to a report from Goldman Sachs earlier this year which suggested JPMorgan is trading at a 20% "conglomerate discount," a spread which could be narrowed by breaking the bank up into two or four parts.
- JPMorgan's management's unwavering view that bigger is better has been a recurring theme throughout today's presentations. JPMorgan may be big, says Dimon, but it's no conglomerate.
- Dimon does however acknowledge the regulatory headwinds to getting bigger, and any growth will surely be organic.
- "P/E ratio has always been wrong, just like the cost of equity has always been wrong, and the market is always wrong," says Dimon, not too worried about his bank's supposed premium valuation compared to the other TBTFs.
- "I know it's only 3:30, but you are welcome to start drinking," he says in conclusion.
- Investor day webcast and presentations
Tue, Feb. 24, 12:55 PM
- JPMorgan's (JPM +2.6%) corporate & Investment bank is set to post year-over-year gains in trading revenue, says unit CEO Daniel Pinto, presenting at the bank's investor day.
- Webcast and presentations
- The forecast is particularly notable because investment bankers for nearly the last year have been using such stages to lower expectations for FICC revenue. Either things are getting better or banks now are beginning to go up against really easy comparisons.
- Earlier this month, Goldman CEO Lloyd Blankfein expressed similar optimism about his bank's Q1 results.
- Previously: JPMorgan investor day: Bigger is better (Feb. 24)
Tue, Feb. 24, 11:41 AM
- "Scale has always defined the winner in banking," says CFO Marianne Lake, who spent a sizable portion of her presentation time explaining why JPMorgan (JPM +2.5%) should not be broken up. The bank, she says, generates $18B per year in synergies as one unit - $15B from added revenues from sales across different units, and $3B in cost savings.
- Investor day webcast and presentations
- Of course, this doesn't preclude the Bank of Dimon from shrinking some of its businesses in order to ease capital requirements, with case-in-point today's announcement to reduce certain institutional deposits by up to $100B by year-end. The move comes as perverse new federal rules basically penalize banks for holding excess deposits over worry about their quick exit during another financial crisis.
- Investors are liking the news, bidding up JPMorgan today more than any of the other TBTF banks.
- Previously: JPMorgan to announce deposit fees for big clients (Feb. 24)
Tue, Feb. 24, 3:05 AM
- JPMorgan (NYSE:JPM) is preparing to charge an array of financial firms, including hedge funds, private-equity firms and foreign banks, for some deposits, citing new rules that make holding money for the clients too costly.
- Certain deposits are less profitable to handle than they used to be due to new federal rules that can penalize banks for holding deposits viewed as prone to fleeing during a crisis or a stressed environment, sources told WSJ.
- Specifics are likely to be unveiled today at JPMorgan's annual strategy outlook with investors.
- JPM -0.2% AH
Tue, Feb. 24, 1:56 AM
- U.S. officials are probing at least 10 major banks for the possible rigging of precious-metals markets, even though European regulators shelved a similar investigation after finding no evidence of wrongdoing, WSJ reports.
- The DOJ is scrutinizing the price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation.
- Banks under scrutiny: HSBC, BNS, BCS, CS, DB, GS, JPM, OTCPK:SCGLY, OTCPK:SGBLY, UBS
Fri, Feb. 20, 4:48 AM
- Squeezed by new capital and risk rules and tough markets, Wall Street is taking the ax to its workforce, a report by London research firm Coalition shows.
- The number of investment bankers, traders, salespeople and research analysts at the world’s largest banks has fallen 20% globally since its recent peak in 2010.
- While job cuts on the front end have become standard, firms have been increasing their back-office hiring to beef up controls in areas ranging from compliance to risk.
- Related tickers: BAC, BCS, OTCQX:BNPQY, C, CS, DB, GS, JPM, MS, UBS
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)
Wed, Feb. 18, 2:49 PM
- The financial sector had begun to turn around a dismal start to the year as February brought forth a string of hawkish Fed heads suggesting a June rate hike, but the XLF is lower by 0.8% after just-released FOMC minutes suggest markets and the hawks are getting ahead of themselves. KBE -1.7%, KRE -2%
- The TBTFs: BofA (BAC -2.2%), JPMorgan (JPM -1.4%), Wells Fargo (WFC -1.6%), Ciitgroup (C -0.8%)
- The regionals: Regions Financial (RF -1.6%), KeyCorp (KEY -1.6%), PNC Financial (PNC -1.3%), BB&T (BBT -1.5%), Fifth Third (FITB -1.6%), SunTrust (STI -1.7%), First Niagara (FNFG -2.1%), M&T (MTB -1.9%), U.S. Bancorp (USB -1.3%), First Horizon (FHN -2.7%).
- Online brokerage: Schwab (SCHW -2.3%), E*Trade (ETFC -1.7%), Ameritrade (AMTD -1.1%), Interactive Brokers (IBKR -0.9%).
- Previously: FOMC minutes: June rate hike not a slam dunk yet (Feb. 18)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWC, FINZ, KRS
Wed, Feb. 18, 7:35 AM
- While not necessarily looking to exit businesses like interest rate trading, prime brokerage, and the so-called delta-one equities desk, new regulatory/capital rules have made them less profitable, and Daniel Pinto, CEO of JPMorgan's (NYSE:JPM) corporate and investment bank, is looking at ways to boost efficiency, reports Bloomberg.
- JPMorgan isn't the only one eyeing cuts, and the bank has actually gained market share since the financial crisis as competitors have pulled back. Profitability, however, is down, with ROE at the unit falling to 10% last year from 15% in 2013, and a new Fed proposal might require even more capital be allocated to the business.
Wed, Feb. 11, 3:07 PM
- Another banker exiting for greener pastures, or perhaps signaling the lender's bigger ambitions in Mexico, JPMorgan's (JPM -0.2%) head of debt underwriting for that country, Luis de la Pena, is leaving the bank today.
- JPMorgan was Mexico's 8th-largest bond underwriter in 2014 with about a 6% market share, according to Bloomberg. De la Pena had been with the bank since 2012.
Tue, Feb. 10, 2:56 AM
- In the final stages of a long-running investigation, the U.S. Department of Justice has recently informed Barclays (NYSE:BCS), JPMorgan (NYSE:JPM), the Royal Bank of Scotland (NYSE:RBS) and Citigroup (NYSE:C) that they must plead guilty to criminal charges that they manipulated the prices of foreign currencies, NYT reports.
- Last November, regulators fined five major banks a total of $3.4B for failing to stop traders from trying to manipulate the foreign exchange market, following a year-long global investigation.
- In a separate forex probe disclosed today, the NY Department of Financial Services sent subpoenas to several other banks, expanding its investigation of whether the banks' electronic trading platforms allowed them to front-run clients in the forex market.
- Previously: FT: Forex trading probe widens (Feb. 09 2015)
Fri, Feb. 6, 9:50 AM
- Financials have been mercilessly pounded in 2015 as hopes for higher interest rates looked like they might be dashed yet again, but today's blowout jobs number - firmly putting a June rate hike on the table - has brought in the dip-buyers.
- The major averages are flat, but the XLF is up 1.4%. The Regional Bank ETF (KRE +2%) and the Bank ETF (KBE +2.1%) are doing even better.
- Among the yield-starved banking names: Bank of America (BAC +3.1%), JPMorgan (JPM +2.6%), Citigroup (C +2%), Regions Financial (RF +4%), KeyCorp (KEY +3%), PNC Financial (PNC +2.9%), SunTrust (STI +2.3%), Zions (ZION +3.6%), Synovus (SNV +2.3%).
- Insurers: MetLife (MET +2%), Prudential (PRU +3.2%), Lincoln National (LNC +4.6%). AIG (AIG +1.5%).
- Trust banks: BNY Mellon (BK +2.7%) State Street (STT +1.9%), Northern Trust (NTRS +2.3%).
- Online brokers (currently getting killed on money-market fee rebates): Schwab (SCHW +4.5%), TD Ameritrade (AMTD +3.5%), E*Trade (ETFC +2.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Tue, Feb. 3, 1:01 PM
- This particular class-action suit has been running for six year and relates to $17.58B of MBS sold by Bear Stearns before JPMorgan (JPM +1.6%) purchased the failing investment bank. Among the plaintiffs in this case were the Public Employees' Retirement System of Mississippi and the New Jersey Carpenters Health Fund.
- A judge must still approve the settlement.
Sat, Jan. 31, 4:22 PM
- JPMorgan (NYSE:JPM) has agreed to pay $99.5M to settle its portion of an antitrust lawsuit in which investors (including hedge funds, pension funds and the city of Philadelphia) accused 12 major banks of rigging prices in the $5.3T-a-day foreign exchange market.
- The settlement follows the bank's agreement last November to pay about $1B in civil penalties to resolve related claims by U.S. and European regulators.
Thu, Jan. 29, 11:47 AM
- "We certainly recognize all the headwinds, notably on the regulatory capital side, but low-hanging fruit on capital efficiency actions should drive some ROE improvement," says the team of David Trone and Pankaj Chitrakar, and they expect better CCAR outcomes for at least a few of the names (including Citi, one would think) in a few weeks.
- As for operating results, whether they come in good or not so good this year hinges on whether the Fed hikes or not. That forecast sounds a lot like 2014, 2013, and 2012, but the two note the likelihood of higher rates appears far higher this year.
- They maintain Buy ratings on Citigroup (C +0.1%), Morgan Stanley (MS +1%), Goldman Sachs (GS +1%), Bank of America (BAC +0.7%), and JPMorgan (JPM +1.1%), with Citi, Goldman, and Morgan Stanley their top picks.
- Previously: Financials go on sale in January (Jan. 24)
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