Oct. 20, 2014, 3:52 PM
- "Based on my experience as an insurance regulator, and a regulator of one of MetLife’s (MET +0.5%) larger insurance subsidiaries, I do not believe that MetLife’s businesses and corporate structure create the kind of systemic risk that Dodd-Frank’s SIFI designation process was designed to address," says Delaware Insurance Commissioner Karen Weldin Stewart in a letter to the U.S. Treasury Secretary and other federal regulators.
- To review, the Financial Stability Oversight Council last month proposed designating MetLife as systemically important, a decision the insurer (not to mention logic) has taken serious issue with. Still ahead is a hearing in which MetLife would be able to challenge the FSOC.
- Stewart is not the first state regulator requesting the Feds stay off his/her turf. That would be New York's Ben Lawsky. Stewart, however, goes further, noting MetLife already faces thorough oversight in any state where it does business and no longer engages in any significant non-insurance activities.
- "Another layer of oversight over MetLife’s activities is redundant, unnecessary and will only serve to impede the quality of service MetLife provides to its customers and the value it delivers to its shareholders."
Oct. 20, 2014, 2:53 PM
- Analysts Joshua Shanker and Phil Stefano still don't love the company, noting a bloated expense structure, high reliance on positive capital markets trends, and a high-profile trial alleging AIG didn't act in shareholder interest when it accepted a government bailout, but the stock has declined enough of late to make it a bargain even with those negatives.
- "The financial engineering at the company currently makes up for the shortcomings in its operational performance," they say. "We believe that has been true for the last three years, and will continue to be true for the foreseeable future." Should the operational issues get resolved, look out above.
- The duo also remind that AIG isn't the only insurance stock taking a beating of late, and Ameriprise FInancial (AMP +0.6%), MetLife (MET +0.5%), and Prudential (PRU -0.4%) have taken even bigger hits. Exposure to 10-year interest rates is the reason, they expect, pointing to P&C insurers which haven't fallen nearly as far.
- Previously: Deutsche buys the dip in AIG
Oct. 15, 2014, 10:49 AM
- Bank earnings models will no doubt need to be tweaked as the sure thing of higher rates becomes somewhat less sure, with the 10-year U.S. Treasury yield plunging all the way down to 2%, and 30-day Fed Funds futures - just weeks ago pricing in 100% chance of a rate hike by June 2015 - now sees no move until December 2015.
- The XLF is lower by 1.9% and the Regional Banking ETF (NYSEARCA:KRE) is down 2.1% (the S&P 500 is off a mere 1.1%). Among individual names, KeyCorp (KEY -6.4%), First Bancorp (FBP -6.4%), Regions Financial (RF -4%), U.S. Bancorp (USB -2.2%), Fifth Third (FITB -2.6%), Bank of America (BAC -4%), Citigroup (C -3.3%), JPMorgan (JPM -2.8%), Wells Fargo (WFC -1.9%).
- Financial ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
- Life insurers were also waiting on higher rates and they're slipping more than the averages as well. MetLife (MET -3.7%), Prudential (PRU -2.9%), Manulife (MFC -3.5%) Sun Life (SLF -3.4%), Lincoln Financial (LNC -3.9%).
- Insurance ETFs: KIE, IAK, KBWP, KBWI
- Previously: BofA call: Assumption about higher rates not so sure anymore
Oct. 14, 2014, 3:31 PM
- Global growth, foreign-exchange, oil, and small caps are the subject of every client inquiry, says David Kostin. His team's recommendation: Buy "American exceptionalism."
- In Kostin's view, U.S. economy and corporate fundamentals are still strong, with economic growth expected by Goldman economists to be 3.2% next year, the fastest expansion since 2005. Europe is expected to grow just 1%.
- What his team likes are those stocks of companies which have a high proportion of domestic sales, plus sectors like Consumer Staples (XLP -0.1%) and Discretionary (XLY +0.7%) which stand to benefit from lower oil prices (plunging again today).
- As for small caps (IWM +0.9%), Kostin is wary, noting downward earnings revisions have boosted small cap P/E ratios even as prices have declined.
- The list of S&P 500 names capturing two or more of Kostin's themes: GT, GM, PCLN, AMZN, CMCSA, LOW, DG, TSN, ADM, CVS, AVP, WAG, PXD, HAL, JPM, BAC, SCHW, PNC, MS, C, GNW, LNC, MET, THC, AET, UNH, ESRX, HUM, WLP, BIIB, GILD, DAL, CMI, FLR, CRM, JBL, MA, FB, MU, FSLR, VMC, MON, T.
Oct. 9, 2014, 9:03 AM
- Three months ago, the two companies went public with plans to develop an initial portfolio of eight state-of-the-art industrial facilities across four states and totaling nearly 6M square feet.
- Project #2 announced today is three industrial distribution parks in the Seattle area for nearly $63M. The sites will add more than 900K square feet of warehouse space to the region.
- MetLife (NYSE:MET) will be the majority owner and Panattoni will be the managing minority partner.
- Source: Press Release
Sep. 30, 2014, 3:14 PM
- Insurers (mostly MetLife MET, the others are at least publicly keeping their lips zipped) are not pleased about being subject to capital rules designed for banks.
- The so-called quantitative impact study (QIS) will take input from the insurers as its attempts to figure out the impact on them of the new banking regulations.
- Others of interest include AIG and Prudential (NYSE:PRU).
Sep. 17, 2014, 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
Sep. 4, 2014, 4:28 PM
- "MetLife (NYSE:MET) strongly disagrees with the Financial Stability Oversight Council's preliminary designation of Metlife as a SIFI," says CEO Steven Kandarian. "MetLife is not systemically important under the Dodd-Frank Act criteria. In fact, MetLife has served as a source of financial strength and stability during times of economic distress, including the 2008 financial crisis."
- At the moment, the SIFI designation would impose capital rules designed for banks on the insurer.
- Met ins't ruling out any remedies available to it - for now, the company has 30 days to request a hearing before the FSOC to contest its designation.
- The SIFI determination can hardly be a surprise given Prudential has also been deemed such, and Met's shares are unchanged in fairly active after-hours action.
- Source: Press Release
Aug. 20, 2014, 2:51 PM
- The Financial Stability Oversight Council, reports the WSJ, has closed the books on the evidentiary record it has been compiling, and could reveal this as soon as tomorrow. Though no names will be named, it's no secret MetLife (MET +0.3%) and the FSOC have been talking about the insurer's possible systemically important designation for months.
Aug. 12, 2014, 9:42 AM
- The Loop is a 435K square foot outdoor retail center in Kissimmee, Florida, and MetLife (MET +0.4%) purchased the asset from an institutional client of AEW Capital Management. Terms were not disclosed. HFF (HF +0.1%) brokered the deal.
- MetLife is further diversifying its real estate equity holdings by adding a high quality retail outlet such as The Loop to our portfolio, says Robert Merck, the insurer's global head of real estate.
- Source: Press Release
Aug. 5, 2014, 2:54 PM
- The insurer "has an active primary regulator carefully monitoring the conditions of the firm," New York DFS boss Ben Lawsky tells the Financial Stability Oversight Council as that group prepares to likely slap a "systemically important" label on MetLife (MET -1.4%), subjecting it to another layer of federal oversight.
- "MetLife doesn't engage in any non-traditional, non-insurance activities," says Lawsky, and could be unwound in an orderly way should it run into trouble.
- Several members of Congress have also written to the FSOC urging the council to do more to hear MetLife's side of the story before reaching a final decision.
Jul. 31, 2014, 11:10 AM
- “We were cautious and remain cautious in terms of the capital management because of the uncertainty,” says MetLife (MET -2.9%) CEO Steven Kandarian, on the earnings call. “Returning capital to shareholders is a high priority for us. We have to do that consistent with a regulatory environment in which we find ourselves, and as we learn more about that we’ll have more to say.”
- Met currently has in place a "modest" buyback to offset the dilution as part of the purchase of American Life Insurance from Hartford in 2010. Asked if the he could do buybacks beyond that, Kandarian says the insurer needs more guidance from D.C.
- Previously: MetLife slips after reporting light bottom line
- Among the items pressuring Q2 results were events in Russia, but EMEA chief Michel Khalaf reminds Met has been able to adjust expenses accordingly, so as long as the impact is short-term, it shouldn't hit the bottom line.
Jul. 30, 2014, 4:24 PM
- Q2 operating earnings of $1.6B unchanged from a year ago. Operating earnings per share of $1.39 down 3%.
- Americas operating earnings of $1.4B up 5% on revenues of $9.6B up 10%. Retail operating earnings of $652M up 12% thanks to strong markets, but Group, Voluntary & Worksite Benefits operating earnings of $205M down 25% thanks to unfavorable underwriting results in non-medical health.
- Asia operating earnings of $319M down 1% after adjusting for currency movement.
- EMEA operating earnings of $93M up 41% on a constant currency basis.
- Net investment income of $5.1B is unchanged.
- Book value per share excluding AOCI of $50.14 up from $47.20 a year ago.
- Conference call tomorrow at 8 ET
- MET -0.25% AH
- Previously: MetLife misses by $0.02, beats on revenue
Jul. 30, 2014, 4:11 PM
Jul. 28, 2014, 12:00 PM
- The joint venture between MetLife (MET -0.8%) and Norway's sovereign wealth fund purchased the Boston's One Beacon Street office building for about $561M. Met will own 52.5% of the tower, with Norges controlling the rest.
- The two began their partnership late last year, with Met looking for fee income by attracting institutional investors to a new asset-management unit.
- Press release
Jul. 22, 2014, 5:57 PM
- U.S. regulators are poised to label MetLife (NYSE:MET) "systematically important" and a potential threat to the financial system, subjecting the insurer to oversight by the Federal Reserve, Bloomberg reports.
- MET has been under consideration as systemically important for more than a year, and its executives have met more than 10 times with Financial Stability Oversight Council staff members to argue it doesn’t pose a risk.
- The report says a decision by the council may come as early as July 31, when the panel is tentatively planning to meet.
MET vs. ETF Alternatives
MetLife Inc is a provider of insurance, annuities & employee benefit programs in United States, Japan, Latin America, Asia, Europe & Middle East. It offers life insurance, annuities, property & casualty insurance, and other financial services.
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