There are no Transcripts on KBE.
Thu, Sep. 18, 12:53 PM
- Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
- The XLF +1.2%, KBE +1.5%, and KRE +2%.
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
- Lit up bright red is the utility sector (XLU -1%), led by Southern Company (SO -1.1%), Dominion Resources (D -1.2%), Duke Energy (DUK -1.4%), and Pinnacle West (PNW -1.9%).
- Utility ETFs: XLU, IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP, PSCU
Wed, Sep. 17, 3:16 PM
- Leading markets higher as the reality of higher interest rates gets nearer is the financial sector (XLF +0.9%). Whether its banks, brokerages, or insurers, a higher benchmark rate for some time has been considered a key bullish catalyst. An especially large move is being seen in the online brokerage names who have been forced to forego money market fees for years thanks to ZIRP: E*Trade (ETFC +3%), Schwab(SCHW +3.2%), Ameritrade (AMTD +2%).
- Morgan Stanley (MS +1.8%), Bank of America (BAC +1.2%), JPMorgan (JPM +0.9%)
- U.S. Bancorp (USB +1.1%), Regions Financial (RF +2%), New York Community Bank (NYCB +0.8%), Huntington Bancshares (HBAN +1.3%), KeyCorp (KEY +1.3%)
- MetLife (MET +0.6%), Voya Financial (VOYA +0.7%).
- Chubb(CB +0.4%), AIG (AIG +1.1%), Hartford (HIG +0.8%)
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, KBWP, RYF, KBWI, KRS, FINZ
Tue, Aug. 12, 3:46 PM
- More than a third of executives surveyed by Sageworks have little or no familiarity with a proposed new FASB rule which could force lenders to boost reserves held against troubled loans. More than half say they're not planning on modifying their processes until after the rule is implemented (could come by year-end).
- The changes wouldn't take effect until 2017 or 2018, but banks need to start getting ready to amass data now, says Sageworks, as they'll "need a lot more granular data" on individual loans - three or four years worth - to deal with the new regime.
- The new rule would require banks to record losses based on future projections of loans going bad, rather than the current practice of waiting to record losses until they actually occur.
- ETFs: KRE, KBE, IAT, KBWB, RKH, QABA, KRU, KBWR, PSCF, KRS
Thu, Jun. 26, 3:11 PM
- "Five years ago, if the risk group recommended against a strategy or product, it might just be one part of a debate," says Wells Fargo (WFC -0.4%) chief risk officer Michael Loughlin. Now, "when we say no, it's usually no."
- The naysayers are gaining power and multiplying across the banking industry as lenders bow to pressure from regulators to simplify and make safer their operations in the hope of preventing the next financial collapse. For its part, Wells has 2.3K employees in its core risk-management department, up from 1.7K two years ago, and the unit's annual budget has doubled to $500M over that period. Earlier this year, Goldman Sachs (GS -0.2%) made its chief risk officer part of the trader/rainmaker-dominated company management committee for the first time ever.
- The changes are expensive and come at a time of sluggish loan growth and trading revenue, but the banks have no choice as regulators wield the power given them by Dodd-Frank.
- KeyCorp (KEY +0.1%), for instance, used to pay loan officers for meeting profit goals. Now those bonuses can be lost if their work falls short of new risk-management standards. It's no doubt one factor behind sharply lower loan commitments for construction and real-estate development.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KCE, KRU, KBWR, RWW, RYF, KRS, KBWC, FINZ
Wed, Jun. 25, 2:52 PM
- The quest for yield is winning out over regulator efforts to clamp down on risky lending, as an OCC report finds signs of rising credit risk in the banks. The agency notes two areas in particular - leveraged loans and indirect auto loans.
- Leveraged loans are essentially the banker version of high-yield bonds and indirect auto loans are banks financing car loans through an auto dealer.
- 2013's issuance of covenant-lite leveraged loans - which strip away some protection for the lenders - hit $258B in 2013, about equal to the total amount issued between 1997 and 2012.
- "Banks are looking for asset classes that performed better during the last crisis," says the OCC's Darrin Benhart. "The concern of course is that the previous crisis is not always the best indicator of what issues may happen next."
- Full report
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, FINU, QABA, KRU, KBWR, RWW, RYF, KRS, FINZ
Wed, May. 28, 2:16 PM
- The agency will have fewer of its people stationed in the offices of the largest U.S. banks, instead bringing the workers back to OCC offices where they can develop a broader perspective on what may be happening in the financial system.
- The move comes after Comptroller Thomas Curry - who took the reins in 2012 - brought in external consultants to review the OCC's examination program which failed to sniff out much in the way of systemic risk ahead of the financial crisis.
- This action stands in contrast to that of regulators like the FRBNY (which also whiffed on the financial crisis), which is boosting its on-site presence at banks.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
Wed, May. 28, 8:23 AM
- First they came for the big banks, and I did nothing ... The nation's largest lenders nearly sucked dry from mortgage settlements, housing regulators have turned their attention to a number of smaller players, with Fifth Third Bancorp (FITB), SunTrust (STI), and Regions Financial (RF) all recently disclosing investigations into the origination and servicing of home loans. U.S. Bancorp (USB) and Capital One (COF) have also disclosed probes into various mortgage practices.
- Any money recouped from the regional lenders would go a long way towards stabilizing the finances of the FHA which required a $1.7B taxpayer infusion last year. "Settling with the large guys gave [the government] a template," says Eric Wasserstrom from Robinson Humphrey. "The agencies involved in the national mortgage settlement had planned to focus on the largest mortgage servicers first," says the Iowa assistant AG. "Then you move on to other entities."
- ETFs: KRE, KBE, IAT, KBWB, RKH, QABA, KRU, KBWR, KRS
Wed, May. 21, 3:10 PM
- It's only about the "fifth inning" of mortgage investigations, says Michael Stevens, in a phrase likely to send a chill through the boardrooms of banks across the country. Stevens is the FHFA's acting inspector general, and Bloomberg's Jody Shenn - in attendance at the MBA event where Stevens is speaking - says there was a "loud, collective gasp" from the crowd when he uttered that line.
- Stevens says investigators have found improper actions "not only occasionally, but in the end, with almost every" deal examined. “I don’t see anything in the near future that’s going to wipe the slate clean with all of the investigations.”
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, FNCL, KBWB, KME, RKH, FINU, QABA, KRU, KBWR, RWW, RYF, FINZ, KRS
Fri, May. 16, 2:57 PM
- The KBW Bank Index (ETF: KBE) is off about 8% from early April, with the performance of high-profile members like BofA, JPMorgan, Citigroup, Goldman is even worse (though Wells Fargo remains close to an all-time high).
- It used to be, writes Michael Santoli, bank stock action was key to gauge the broader health of the market, but few are fretting now. Instead attention is being paid to the slides in the Russell 2000, high-flying growth names, and Treasury yields.
- Rather than saying anything about the economy, the drop in bank shares could be more about thinning out an easy trade (long) that got too crowded. The latest BAML fund manager survey shows pros as big sellers of bank names in the last few weeks, dropping their allocations to a 10-month low. Even with the selling, their exposure to the sector remains far above the national average.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, PFI, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS
Fri, May. 16, 7:40 AM
- KeyCorp (KEY) and Fifth Third Bancorp (FITB) are among the regional lenders stepping up their commodities business as the big Wall Street banks pull back. "[Regional lenders] are definitely beginning to fill the void left by some of the big guys," says Bonanza Creek Energy CFO Bill Cassidy.
- Others stepping in include Australian bank Macquarie (MQBKY), Cargill, and BP. Last year, the top ten regional banks held an average of $23B in commodity derivatives on their books, up nearly 50% from 2009. Still, the amount is just a speck compared to the $3.9T on the books of the top 6 Wall Street banks.
- Even this modest amount is meaningful though, says Guggenheim's Marty Mosby, as it allows the regionals to "pop out and create some incremental revenue growth."
- ETFs: KRE, KBE, IAT, RKH, QABA, KRU, KBWR, KRS
Fri, May. 9, 12:08 PM
- There's little chance of any action this year, says Guggenheim's Jaret Seiberg, but Congress could have a look at raising the bar at which banks would be considered "systemically important" to $100B in assets from $50B. The idea comes after Fed Governor Daniel Tarullo - the point man at the central bank over bank regulation - in a speech this week suggested a SIFI designation may not be necessary for those lenders with $50B-$100B in assets.
- Being branded a SIFI brings far stricter requirements such as drawing up "living wills" and submitting to the Fed's stress test and CCAR. "If the line were redrawn at a higher figure, we might explore simpler methods for promoting macroprudential aims with respect to banks above $10 billion in assets but below the new threshold," says the central planner from the Fed.
- Making the move to $100B from $50B, says Guggenheim's Seiberg, might be even more likely should Ohio's Sherrod Brown become head of the Senate Banking Committee. A critic of the TBTFs, Brown has also complained about undue burdens being placed on regional lenders such as his home state's Huntington Bancshares (HBAN) and KeyCorp (KEY).
- ETFs: KRE, KBE, IAT, RKH, QABA, KRU, KBWR, KRS, AIRR
Mon, May. 5, 10:20 AM
- A check of the global banks finds the group pacing market declines in morning action after Friday night's warning on Q2 trading revenue from JPMorgan (JPM -2.2%).
- Nomura's Steven Chubak is first out with lower JPMorgan earnings estimates.
- Jim Cramer sums up sentiment: "This has been a house of pain. You can't own these right now. You just can't."
- Morgan Stanley (MS -1.9%), Goldman Sachs (GS -1.5%), Citigroup (C -1.2%), and Bank of America (BAC -1%), Deutsche Bank (DB -1.2%). Far less trading dependent than the other Too Big Too Fails is Wells Fargo (WFC -0.2%).
- The iShares DJ U.S. Broker-Dealer ETF (IAI -1.2%)
- XLF -0.7%, KBE -0.8%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
Mon, Apr. 28, 11:57 AM
- Financial ETFs are the worst performers today thanks to Bank of America's near 5% dive in the wake of the suspension of its capital return plan. BofA is a top-10 holding of no fewer than 28 of about 880 equity-based ETFs tracked by S&P Capital IQ.
- The Financial Sector SDRP (XLF -0.8%) has 6.35% of its AUM in Bank of America, the Vanguard Financials ETF (VFH -0.4%) has a 5.1% weight, and the iShares U.S. Financials ETF (IYF -0.4%) 4.8%. The SPDR KBW Bank ETF (KBE -0.9%) has a 1.92% weighting.
- Previously: Black eye: BofA suspends buyback, dividend hike
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, RWW, RYF, PSCF, FINZ, KBE
Fri, Apr. 25, 7:41 AM
- Bank of America (BAC) is 1.1% lower in premarket action after last night's leak of the DOJ seeking more than another $13B out of the hide of shareholders over legacy mortgage issues, according to Bloomberg. The settlement would come on top of the $9.5B agreed to by the bank to resolve FHFA claims, and a deal could come within the next two months, according to sources.
- Most of the loans in question became BofA's problem after it purchased Countrywide and Merrill Lynch - one made the punk loans and the other packaged them into MBS.
- This deal - which would also resolve state AG charges - would tower over JPMorgan's eye-popper of a $13B settlement from last year, which included $4B for the FHFA.
- They're coming for your banks next: There are another eight lenders under investigation by the DOJ and state attorneys general over similar charges.
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, PFI, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS, AIRR
Tue, Apr. 22, 1:08 PM
- The average compensation at the OCC and the CFPB in 2012 was $190K, writes the AEI's Paul Kupiec, which towers over the average salary of about $50K for bank employees. Is it the special skills of regulators? Probably not. OCC secretaries average about $80K per year and FDIC limo drivers pull down $82K. Human resources management trainees at the CFPB make about $111K.
- In 2012, 68% of FDIC and CFPB staff - and 66% at OCC - made more than 100K per year, with 19% earning over $180K. Less than 7% of employees at these agencies earn less than 50K - put another way, 93% earned more than the average banker's salary in 2012.
- Who pays? Bank shareholders (and customers), mostly, through deposit insurance premiums and examination fees levied by the agencies. The CFPB is funded through the Federal Reserve (which doesn't disclose pay, but it's likely even higher than the other regulators).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, PFI, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS, AIRR
Fri, Apr. 11, 10:52 AM
- Overall traffic to branches was strong in Q1 despite the brutal winter weather (JPM's CFO notably blamed the weather for having a role in its weak Q), says Wells Fargo (WFC +2%) CFO Tim Sloan on the earnings call (his last as CFO). The refinance boom now a bust, Sloan expects a strong purchase market to drive originations growth in Q2. Also commenting on housing/mortgages, CEO John Stumpf notes the number of those buying homes for cash is up.
- As for acquisitions, management says Wells is in a position to do a big one, but is going to be picky.
- Wells sits alone among the TBTF banks in the green in morning action. XLF -0.5%, KBE -0.35%
- Earnings call presentation
- Previous earnings coverage
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