Today, 11:00 AM
- Decoupling of global monetary policy continues to drive dispersion in markets and opportunities for trading businesses to monetize client flows," say Credit Suisse's Christian Bolu and Susan Katzke, expecting healthy Q1 results from the brokerage industry.
- They also note the "digestion" of sizable M&A backlogs will provide a boost to earnings.
- The team boosts its Q1 EPS estimate for Goldman Sachs (GS -0.3%) to $4.30 from $4.16, and see Q1 year-over-year FICC growth for the first time since 2009. ROE should be an industry-leading 11%. They'll also be looking for management earnings call commentary surrounding capital plans. The target price of $225 is 1.3x book value and 12x 2016 estimated earnings.
- Morgan Stanley (MS -0.2%), however, rates just a Neutral as core trading revenues will be lower Y/Y thanks to elevated commodities revenue a year ago.
Today, 7:41 AM
- The moves are key to the next phase of Morgan Stanley (NYSE:MS) CEO James Gorman's turnaround plan, as well as to build a bench for the next generation of leadership.
- The bank this week promoted 46 year-old investment banker Jonathan Pruzan to CFO to replace the departing Ruth Porat.
- Were Gorman to exit sooner rather than later, the short list of successors would include the head of wealth management Greg Fleming and the head of investment banking Colm Kelleher, but the list is far longer if Gorman moves along further down the road (which appears to be his intention at the moment).
- Less noticed than the Porat departure was last week's reshuffle of securities and wealth management leadership - the intention of which was to "cross-pollinate" key management.
Yesterday, 8:04 AM
- Jonathan Pruzan "understands the current regulatory environment, having shepherded clients” through the stress tests and CCAR, says Morgan Stanley (NYSE:MS) CEO James Gorman.
- Rather than counseling Gorman, Pruzan has spent much of his career advising the bank's competitors on many of the same regulatory issues - capital raises/returns, expand/shrink the balance sheet, and stroking/confronting regulators and ratings agencies - he'll have to deal with as CFO.
- "In the old days, the CFO was more of a clinician who worked on the numbers," says U.S. Bancorp CEO Richard Davis who has known Pruzan for over a decade and calls him "perfectly suited" for job. "But now financial-services firms have to work on the stress tests, and handle the diplomacy that goes with working with the ratings agencies, the analysts, the shareholders and all the constituencies who have to meet with him."
- Source: WSJ
- Previously: Morgan Stanley moves quickly to fill CFO slot (March 24)
Tue, Mar. 24, 9:33 AM
- Current co-head of the Global Financial Institutions Group at the bank, Jonathan Pruzan will take over for Ruth Porat as Morgan Stanley's (MS -0.7%) CFO, according to a company-wide memo from CEO James Gorman.
- Pruzan has been with the bank for more than 20 years, and played a big role helping clients through the Fed's stress test and CCAR processes.
- Previously: Google hires new CFO from Morgan Stanley (March 24)
Tue, Mar. 24, 9:18 AM
- Morgan Stanley (NYSE:MS) CFO Ruth Porat has been named Google's (NASDAQ:GOOG) new CFO, effective May 26.
- Porat, 57, has been Morgan Stanley's CFO since 2009. Before that, she was the company''s vice chair of investment banking. In 2013, Porat was rumored to be in the running for deputy Treasury secretary, before withdrawing her name from the race.
- News of her hiring comes two weeks after Google announced long-time CFO Patrick Pichette is retiring. Many investors have been hoping a new CFO will sign off on dividends and/or buybacks - Morgan Stanley has a history of providing both during Porat's tenure as CFO.
- GOOG +1.1% premarket to $565.00.
Mon, Mar. 23, 11:53 AM
- A Pittsburgh-based father-daughter team adds to the rank of breakaway wealth managers, and have begun transitioning more than $200M in client assets they managed while at Morgan Stanley (MS -0.3%), reports the WSJ.
- The new firm, Botkin Group, is affiliated with LPL Financial (LPLA -0.4%).
- “We focus on people who need to generate income from their investments,” says Sara Botkin. "The big firms are having a bit more of a push toward banking and lending [products]...our clients don’t want to take on debt.”
Mon, Mar. 23, 8:58 AM
- In what could be a big boon for overseas banks doing business in China, Beijing is mulling sweeping changes for the securities industry which would include allowing foreign banks controlling stakes in their local joint ventures, reports Bloomberg.
- The looser restrictions would let players like Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB), and Citigroup (NYSE:C) compete more effectively with dominant incumbents like Citic Securities.
- Current rules approved in 2012 allow overseas banks to just 49% ownership of securities firms. Prior to that, the limit was 33%. The above-listed banks have all entered the market since 2007.
Fri, Mar. 20, 8:22 AM
- Morgan Stanley (NYSE:MS) won more than 90 prime-brokerage mandates in Asia last year at a time when toughened capital and liquidity rules had rivals pulling back.
- “Funds of all sizes have value to us,” says Lorraine Wong, Morgan's head of Greater China brokerage. “While larger clients are clearly critical to our franchise, we are also focused on identifying the next generation of up-and-coming funds.”
Thu, Mar. 19, 2:40 PM
- An investment banker who co-heads Morgan Stanley's (MS -2.4%) capital markets arm, Raj Dhanda moves to wealth management, where he'll replace Andy Saperstein as head of investment products and services. Saperstein moves over to Morgan's banking and trading division, where he'll be the co-COO, taking over from Mo Assomull.
- Assomull will take Dhanda's job in the investment banking operation.
- The moves appear aimed building a bench for the C-suite.
- “Cross-pollinating key leaders across our major businesses further knits the Morgan Stanley culture and enhances our ability to deliver the entire firm for the benefit of our clients," says CEO James Gorman.
- Source: WSJ
Thu, Mar. 19, 12:35 PM
- “It would be very much worth considering treating those two firms” like other banks, says Fed governor Daniel Tarullo, speaking to the Senate Banking committee.
- At issue is a clause in 1999's Gramm-Leach-Bliley Act (that era's version of Dodd-Frank) which "grandfathered" in any commodity trading and investment activities for investment banks who later converted to BHCs, i.e.Goldman Sachs (GS -1.1%) and Morgan Stanley (MS -2.1%).
Tue, Mar. 17, 11:10 AM
- A possible harbinger of things to come next month when the big banks report Q1 earnings, profits at Jefferies plunged in FQ1 (ended Feb. 28), with FICC, capital markets, and investment banking particularly weak.
- Previously: Poor results at Jefferies sinks Leucadia (March 17)
- Jefferies parent Leucadia is lower by 3.7%. Goldman Sachs (GS -1.1%), Morgan Stanley (MS -0.9%), JPMorgan (JPM -1.2%), Citigroup (C -0.1%), Bank of America (BAC -0.8%).
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Thu, Mar. 12, 12:47 PM
- Citigroup's (C +2.7%) $7.8B in buybacks was 10% higher than estimated by MKM analyst David Trone. Combined with the nickel dividend, that's total shareholder returns of $8.4B vs. his $7B expectation.
- Bank of America (BAC -1%) - though given just conditional approval - is set for $4B in buybacks and a nickel dividend. That's a total return of $6.1B vs. Trone's $3.1B estimate. Trone notes the bank can proceed with its buyback prior to resubmitting plans.
- JPMorgan's (JPM +1%) $6.4B buyback was shy of Trone's $7B estimate, but the 10% dividend increase was better than forecast. The total capital return of $12.9B vs. his $13.2B forecast is a "marginal negative."
- The dividend hike to $0.65 at Goldman (GS +2.1%) beat Trone's expectation of $0.62. As for the buyback, Goldman's policy of not disclosing the amount remains in place.
- Morgan Stanley's (MS +4.5%) capital return of $4.3B is more than double Trone's $1.9B estimate.
- Source: Benzinga
Thu, Mar. 12, 8:07 AM
- Citi's (NYSE:C) quarterly dividend of $0.05 and $7.8B in buybacks were somewhat better than expected, and Regions Financial's (NYSE:RF) buybacks of $875M was higher than the $625M estimate (Regions also boosted its dividend by 20%).
- KeyCorp (NYSE:KEY), Morgan Stanley (NYSE:MS), and SunTrust (NYSE:STI) were also winners after announcing larger-than-forecast buybacks.
- Bank of America (NYSE:BAC) is a "slight disappointment," but some investors had feared an outright rejection of the capital plan, so maybe the resubmission request isn't the worst outcome.
- Previously: Corbat likely keeping his job as Citi cruises through CCAR (March 11)
- Previously: Regions Financial boosts payout by 20% after CCAR approval (March 11)
- Previously: KeyCorp declares $0.075 dividend (March 11)
- Previously: Morgan Stanley intends to declare $0.15 dividend (March 11)
- Previously: SunTrust Banks declares $0.24 dividend (March 11)
- C +3.4%, RF +3.8%, KEY +1.7%, MS +2.7%, STI +2.1%, BAC +0.6% premarket
Wed, Mar. 11, 5:36 PM
Wed, Mar. 11, 4:44 PM| 4 Comments
Wed, Mar. 11, 4:44 PM
- Goldman's Sachs' (NYSE:GS) first score of 5.8% was only marginally ahead of the 5% threshold, but the resubmitted capital plan came in at 6.4%
- Morgan Stanley (NYSE:MS) was 5.9% on both tests, so one wonders what changed. The company has announced a $3.1B buyback through the end of 2016 Q2 as well as a boost in the quarterly dividend to $0.15 per share from $0.10.
- JPMorgan (NYSE:JPM) lifted its score from a barely scraping by 5% to 5.5%.
- There's no word yet on the details of Goldman's or JPMorgan's plans.
- GS +0.9%, MS +1.8%, JPM +0.1% after hours.
- Previously: BofA must resubmit capital plan; Deutsche and Santander rejected (March 11)
- CCAR results
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