Mon, Jul. 20, 2:55 PM
- JPMorgan (JPM +0.4%) faces the largest capital "surcharge" or 4.5% of its risk-weighted assets, with the other seven lenders falling in the 1-3.5% range.
- Citigroup's (NYSE:C) surcharge is 3.5%, BofA (NYSE:BAC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) 3%, Wells Fargo (NYSE:WFC) 2%, State Street (NYSE:STT) 1.5%, and Bank of New York Mellon (NYSE:BK) 1%. Taken together, the group's capital cushion will more than $200B larger than if the surcharge was not implemented.
- The surcharges will begin to be implemented on January 1, and fully phased in by January 2019. JPMorgan has taken steps to boost its capital levels, and Fed officials indicate the bank is about $12.5B shy of the full surcharge, reports the WSJ.
- The other lenders currently have the necessary capital.
- This new requirement comes on top of the existing base 7% common-equity capital standard necessary for most banks.
- Federal Reserve press release
Mon, Jul. 20, 7:16 AM
- Q2 net income (excl. DVA) of $1.7B or $0.79 per share vs. $1.2B and $0.58 one year ago. ROE (excl. DVA) of 9.1%.
- Institutional Securities pre-tax income of $1.44B on revenue of $4.99B vs. $873M and $4.161B a year ago. Advisory revenue of $423M, equity underwriting revenue of $489M and fixed income underwriting revenue of $528M all roughly flat Y/Y. Equity sales and trading revenue of $2.3B vs. $1.8B a year ago. FICC revenue of $1.3B up from $1B - this as most other banks saw Y/Y decline.
- Wealth Management pre-tax income of $885M on revenue of $3.875B vs. $763M and $3.702B a year ago. Asset management fee revenue of $2.2B vs. $2.1B. Transactional revenue of $8872M vs. $991M. Net interest income of $737M vs. $577M. Total client assets of $2T. Client assets in fee-based accounts of $813B up 7% Y/Y. Average annualized revenue per representative of $978K up 8% Y/Y.
- Investment Management pre-tax income of $220M on revenue of $751M vs. $209M and $705M a year ago.
- CET 1 ratio of 12.5%. Tangible book value per share of $29.54.
- Conference call at 8:30 ET
- Previously: Morgan Stanley beats by $0.05, beats on revenue (July 20)
- MS +3.8% premarket
Mon, Jul. 20, 7:02 AM
Sun, Jul. 19, 5:30 PM
Fri, Jul. 10, 7:54 AM
- Royal Dutch Shell (RDS.A, RDS.B) agrees to buy Morgan Stanley's (NYSE:MS) European gas and power trading portfolio for an undisclosed sum.
- "Comprising predominantly physical and financial gas and power trades, the deal further expands Shell's activities in core energy markets across Europe," the company says.
- Morgan Stanley’s exit from trading power and gas in Europe follows similar moves by Deutsche Bank, Bank of America and Barclays in the past two years.
Mon, Jul. 6, 4:41 PM
- Last year, the Fed and FDIC found most of wind-down plans submitted by twelve of the largest U.S. banks (or U.S. units of overseas banks) had numerous deficiencies, and sent the lenders back to the drawing board.
- The two government agencies today posted public sections of the latest versions of the living wills, and said they will begin reviewing. Feedback is expected before year-end.
- The lucky 12: BAC, BK, C, GS, JPM, MS, STT, UBS, WFC, BCS, CS, DB.
Mon, Jun. 29, 8:53 AM
- Since the financial crisis, Morgan Stanley's (NYSE:MS) plan has been to de-emphasize its trading operations in favor of more stable, less risky businesses like wealth management. It's a move which has won the applause of investors and analysts, and Morgan is up 62% over the past two years vs. Goldman Sachs' - still a believer in fixed-income - 41% advance.
- However, with profitability targets still to be hit, U.S. rates on the rise, and a recent credit-rating boost from Moody's, Morgan CEO James Gorman and team see an opportunity for the bank to take a larger slice of Wall Street's roughly $100B in annual fixed-income trading revenue.
- In recent weeks Morgan has reportedly been soliciting more fixed-income business and pitching more trading ideas to its clients. Of import for those worried about risk: Management believes it can gain more business - perhaps several billion above the $3.8B in revenue in 2014 - without enlarging the balance sheet. By focusing on large money managers, Morgan hopes for a speedy pace of paper coming and going from the bank, thus keeping inventories trimmed.
- Source: WSJ
Wed, Jun. 10, 10:01 AM
- More than six years after the bottom, only four of the globe's biggest banks sport stock prices trading at a premium to book value. Leading the way is UBS at about 1.4x book. Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), and Morgan Stanley (NYSE:MS) also trade for north of book.
- Deutsche Bank (NYSE:DB) - whose ROE of 2% is about one-tenth of what it was pre-crisis - brings up the rear at just about 0.5% of book. Barclays (NYSE:BCS) sells for roughly 0.7x book, and Bank of America (NYSE:BAC) only slightly more than that.
- Checking further on ROE, Goldman leads the way at about 12%. Citigroup (NYSE:C) is less than 5%, but stands out as being the only bank with a higher ROE today than before the crisis.
- Looking at total return since the crisis, Goldman again leads the way at about 170%, with Morgan Stanley and JPMorgan a close second/third. Citigroup is the only major bank with a negative total return over that time frame.
- Source: Bloomberg
Wed, Jun. 3, 12:36 PM
- “A clear separation has emerged between the biggest brokers and the rest of the market,” says Jay Bennett of Greenwich Associates. A survey by his firm finds the top four U.S. equity brokers - Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Morgan Stanley (NYSE:MS) - are widening their market share lead over the rest of the industry.
- According to Greenwich, all had more than an 8% share of trading, with number five Credit Suisse (NYSE:CS) at 6.9%.
- Bennett calls it a segmented market composed of the big four, the rest of the bulge bracket, and a long tail of competitors with relatively smaller shares.
- ETFs: IAI, KCE, KBWC
Wed, Jun. 3, 11:01 AM
- For regulatory reasons (pressure to counter money laundering), Morgan Stanley (MS +1.6%) recently shifted coverage of Caribbean and Latin American clients out of wealth management and into its institutional business, according to the company.
- As a result, Morgan's The Americas Group, led by Don d'Adesky, moved its practice and $2.4B in client assets to Raymond James (RJF +2%). While brokerages typically go to the mattresses to retain such business, a Morgan spokeswoman simply said the bank was no longer able to accommodate the team's business model.
- Raymond James pronounces itself "very comfortable with the team's business model."
- Source: WSJ
Mon, Jun. 1, 3:42 PM
- Morgan Stanley's (MS +1%) brokerage has about 4M clients and $2.05T in assets, with private wealth management dealing with those customers with a net worth of $20M or more.
- Eric Benedict is leaving after 19 years with the firm, and he's being replaced by Vince Lumia, currently head of capital markets for the brokerage division. Investment banker Elizabeth Dennis will succeed Lumia.
- The reshuffle continues an effort by CEO James Gorman to build a deeper bench of top management and create stronger ties between the bank's two largest divisions.
- Source: WSJ
Thu, May 28, 2:43 AM
- Morgan Stanley (NYSE:MS) CEO James Gorman defended the 25% pay hike to $22.M he was awarded last year - reportedly the highest among Wall Street CEOs - saying it was justified by the bank's performance.
- "We had three years where the stock went up...so the board, representing shareholders, thought that justified very strong performance," Gorman declared. "In previous years, when we underperformed, we were payed down and that's the way it should be."
- Shares of the bank have risen over the past three years, up 19% in 2012, 60% in 2013 and 23% in 2014.
- Previously: Morgan Stanley's Gorman gets 25% pay raise in 2014 (Apr. 01 2015)
Tue, May 19, 11:17 AM
- April was about as expected, but revenue from fixed income, currencies, and commodities isn't looking good at the investment banks in May, according to the team at JPMorgan.
- Equity business, however, is outperforming, which should be to the benefit of shops like SocGen (OTCPK:SCGLY), UBS, and Morgan Stanley (NYSE:MS).
- At Morgan Stanley, CEO James Gorman - speaking to reporters following the annual meeting - says market conditions have remained "solid" in spite of geopolitical news which would have spooked investors in the past. Gorman declined to give a more specific update on how Q2 was faring at his bank.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Mon, May 11, 5:22 PM
- Morgan Stanley (NYSE:MS) confirms the sale of its Global Oil Merchanting unit of its commodities division, to Castleton Commodities International; financial terms are not disclosed, but FT reports the purchase price is at least $1B.
- The sale marks the end of Wall Street’s controversial involvement in physical oil trading; MS had agreed to sell the business to Russia's Rosneft but the deal fell apart amid tensions over the Ukraine conflict.
- While smaller now than in its heyday, MS was still handling ~2M bbl/day, or 2% of global demand, and has 45 leases totaling ~30M barrels of tank capacity.
Wed, May 6, 5:58 PM
- Morgan Stanley's (NYSE:MS) commodities group says it renewed a refined product storage deal with TransMontaigne Partners (NYSE:TLP) seven months early, extending its lease agreements for ~2.7M barrels of refined product storage in Mississippi.
- TLP says it is also in the preliminary stages of pursuing an expansion of its Collins terminal facility that would include an additional 1M barrels of storage.
- MS's move comes as it continues to seek a buyer for its physical oil business after a deal to sell it to Russia's Rosneft fell apart last year.
Fri, May 1, 9:54 PM
- With plans (but not detailed plans, yet) to go public, Spanish-language broadcaster Univision swung to a $139.7M net loss in Q1, from a year-ago profit of $6.2M.
- The company hired Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Deutsche Bank (NYSE:DB) to lead an IPO that it hopes will raise $1B, which would value the broadcaster around $20B.
- Revenues were up 0.6% to $624.7M. Univision blamed its loss on termination fees that it owed to the private-equity owners of its parent, Univision Communications, as well as to Grupo Televisa (NYSE:TV).
- Televisa used convertible debt to build a 38% stake in Univision and has the right to take that to 40%, so it is set to draw a payoff from Univision's eventual offering. It also drew a record $314M rebroadcasting royalty from Univision in 2014.
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