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February 13, 2012, 7:29 AM EST
By Radi Khasawneh and Alberto Fuertes
Feb. 10 (Bloomberg) — U.S. money-market funds more than doubled their short-term loans to French banks in January, ending six months during which they reduced funding.
The funds owned $8.6 billion of French bank certificates of deposit, time deposits, commercial paper and repurchase agreements on Jan. 31, up from $3.2 billion in December, according to reports from the eight largest prime U.S. funds compiled and published in today’s Bloomberg Risk newsletter. At the end of 2010, the equivalent figure was $78 billion.
French banks have had to increase their deposit base to secure funding after the sovereign-debt crisis spread last year, spurring concern about the solvency of European financial institutions. The revival of U.S. money fund investing followed the European Central Bank’s decision to provide three-year funding for banks in December, allaying some of those concerns.
“There definitely was a shift in sentiment around the second week in January,” said Deborah Cunningham, head of money market funds for Pittsburgh-based Federated Investors Inc. The ECB’s loans and a reversal of “year-end window dressing” in December played the biggest role, she said.
Federated manages $245 billion in U.S.-registered money funds, according to research firm Crane Data LLC.
Societe Generale
The largest beneficiary among the French banks was Societe Generale SA, which increased funding more than 10-fold to $3.4 billion in January. BNP Paribas SA and Credit Agricole SA attracted 50 percent and 43 percent more funding from the U.S. money markets, according to a Bloomberg survey.
Officials for all three banks declined to comment.
The funds cut investments in Swedish and Japanese banks, each of which suffered a $9.7 billion reduction over the month. Swiss banks had 5 percent less funding, though banks from all three countries have retained their haven appeal, with money- market funding surpassing 2010 levels.
The ECB provided 489 billion euros ($651 billion) to European banks through a three-year refinancing operation in December and plans to offer a further series of loans at the end of February.
The survey included the eight largest prime money-market funds: Fidelity Cash Reserves, JPMorgan Prime Money Market Fund, Vanguard Prime Money Market Fund, Fidelity Institutional Prime Money Market Portfolio, BlackRock TempFund, Wells Fargo Advantage Heritage Money Markets Fund and Federated Prime Obligations Fund. Together, they manage $597 billion.
‘More Confidence’
“There are thousands of banks across Europe and we only invest in a small number that we believe to be among the strongest institutions representing minimal risk,” Adam Banker, a spokesman for Fidelity Investments, said in an e-mail.
John Woerth, a spokesman for Vanguard Group Inc., said the firm’s money funds don’t own any French bank debt. Officials for JPMorgan and BlackRock declined to comment. A spokesmen for Wells Fargo didn’t respond to a request for comment.
ECB lending “gave market participants a lot more confidence that liquidity was in that marketplace,” said Cunningham at Federated.
Cunningham said higher short-term interest rates and slightly better economic data also helped encourage money funds to lend more to banks in France and other European countries where they had previously pulled back. Annualized rates for overnight lending to European banks were about 0.18 percent to 0.23 percent in mid-January after dropping to as low as 0.01 just before the end of 2011, Cunningham said.
The lending figures include repurchase agreements, which are backed by collateral such as government debt. Collateral- based repo investments make up a larger part of European overall funding, showing that counterparty risk remains a concern for the funds.
European repo deals amounted to $42.8 billion in January, making up 28 percent of European bank securities held at the funds, up from 21 percent in 2010. French bank repo funding was also 28 percent of the total in January, compared with 6 percent in the fourth quarter of 2010.
–With assistance from Fabio Benedetti-Valentini in Paris and Christian Baumgaertel in Boston. Editors: Keith Campbell, Christian Baumgaertel
To contact the reporters on this story: Radi Khasawneh in London at rkhasawneh1@bloomberg.net; Alberto Fuertes in London at afuertes@bloomberg.net
To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net; Edward Evans at eevans3@bloomberg.net; Nicholas Dunbar at ndunbar1@bloomberg.net
2012年2月1日星期三
Wells Fargo moving into investment banking arena
The sun was rising over San Francisco’s financial district in November 2009 when Richard Kovacevich picked up the phone in his 12th-floor office to call Omaha, Neb.
It was about a year after Wells Fargo and Kovacevich, the bank’s chairman at the time, had announced a plan to purchase Wachovia, and he was reaching out to Warren Buffett for help. Just days before, Buffett had heralded his own acquisition of railroad Burlington Northern Santa Fe Corp. for $26 billion.
The billionaire chairman and chief executive officer of Berkshire Hathaway had lined up JPMorgan Chase for financing, Kovacevich recalls. Berkshire also is Wells Fargo’s largest shareholder. The two men spoke for no more than 10 minutes, Kovacevich says, and the banker’s message was simple.
The phone call marked a turning point for Wells Fargo, founded in 1852 to serve Gold Rush pioneers. Far from Wall Street, the bank had long rejected the more volatile and transaction-oriented culture of investment banking. In 2005, Kovacevich, then also CEO, said having superstar bankers focused on one-time deals was “incompatible” with his company.
Now, Wells Fargo is pushing into the business it once shunned, even as rivals facing fickle markets, meager revenue and new restrictions scale back. Financial firms worldwide announced plans last year to cut more than 230,000 jobs as global stock offerings plunged 29 percent and U.S. bond issuance fell 6.8 percent.
The move may help Wells Fargo, led since 2007 by CEO John Stumpf, weather head winds facing commercial banks. Firms are struggling to find growth as rules limit overdraft and debit card fees and lending remains sluggish.
“The government has really limited their ability to grow their operations, so I can understand why they are trying to move out of traditional banking, but it’s a tough thing to do,” said William Frels, CEO of money manager Mairs & Power, which held more than 3.6 million Wells Fargo shares at the end of September. “It’s not a positive. My take is that they are desperate to find new avenues of growth.”
After Kovacevich’s call, Buffett added Wells Fargo to the Burlington deal. The bank has gone on to manage Burlington bond issues and in January 2011 helped underwrite Berkshire’s $1.5 billion debt offering. Buffett declined, through a spokeswoman, to comment.
“Before the crisis, we would have had to compromise both our culture and ethics in order to compete,” said Kovacevich, who, during an almost 35-year banking career that began at Citicorp, pursued his own agenda in defiance of industry trends.
The collapse of Lehman Bros. Holdings and the sales of Bear Stearns and Merrill Lynch in 2008 led Kovacevich and Stumpf to rethink their stance.
Buffett’s imprimatur notwithstanding, Wells Fargo has a big hill to climb. The bank ranked 12th among U.S. debt underwriters in 2011, with 1,824 deals valued at $53.1 billion, behind London’s HSBC Holdings and France’s BNP Paribas SA. In U.S. mergers and acquisitions, Wells Fargo ranked 21st, advising on 31 deals last year valued at $27.6 billion.
Wells Fargo also will have to convince naysayers it won’t go the way of other commercial banks that have sought to enter the investment-banking business only to retreat, says Brian Foran, a New York analyst at Nomura Holdings Inc. Bank of America tried expanding into investment banking with limited success until it purchased Merrill Lynch, he said.
“Investors are nervous,” Foran said. “They feel like they’ve seen this movie before.”
This article appeared on page D – 4 of the San Francisco Chronicle
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It was about a year after Wells Fargo and Kovacevich, the bank’s chairman at the time, had announced a plan to purchase Wachovia, and he was reaching out to Warren Buffett for help. Just days before, Buffett had heralded his own acquisition of railroad Burlington Northern Santa Fe Corp. for $26 billion.
The billionaire chairman and chief executive officer of Berkshire Hathaway had lined up JPMorgan Chase for financing, Kovacevich recalls. Berkshire also is Wells Fargo’s largest shareholder. The two men spoke for no more than 10 minutes, Kovacevich says, and the banker’s message was simple.
‘This is important’
“Here we are, our largest shareholder, and we had never done any meaningful investment banking for him,” said Kovacevich, who stepped down as chairman in 2009 but continues to consult with management and represent the company to customers. “I called him and said we’ve got some great bankers here now, this is important, and we’d really like to show you what we can do.”The phone call marked a turning point for Wells Fargo, founded in 1852 to serve Gold Rush pioneers. Far from Wall Street, the bank had long rejected the more volatile and transaction-oriented culture of investment banking. In 2005, Kovacevich, then also CEO, said having superstar bankers focused on one-time deals was “incompatible” with his company.
Now, Wells Fargo is pushing into the business it once shunned, even as rivals facing fickle markets, meager revenue and new restrictions scale back. Financial firms worldwide announced plans last year to cut more than 230,000 jobs as global stock offerings plunged 29 percent and U.S. bond issuance fell 6.8 percent.
The move may help Wells Fargo, led since 2007 by CEO John Stumpf, weather head winds facing commercial banks. Firms are struggling to find growth as rules limit overdraft and debit card fees and lending remains sluggish.
“The government has really limited their ability to grow their operations, so I can understand why they are trying to move out of traditional banking, but it’s a tough thing to do,” said William Frels, CEO of money manager Mairs & Power, which held more than 3.6 million Wells Fargo shares at the end of September. “It’s not a positive. My take is that they are desperate to find new avenues of growth.”
Record profit
Still, the bank has been profitable for 12 consecutive quarters, through the three-month period that ended on Dec. 31, setting records in the past six. It reported net income of $15.9 billion in 2011.After Kovacevich’s call, Buffett added Wells Fargo to the Burlington deal. The bank has gone on to manage Burlington bond issues and in January 2011 helped underwrite Berkshire’s $1.5 billion debt offering. Buffett declined, through a spokeswoman, to comment.
“Before the crisis, we would have had to compromise both our culture and ethics in order to compete,” said Kovacevich, who, during an almost 35-year banking career that began at Citicorp, pursued his own agenda in defiance of industry trends.
The collapse of Lehman Bros. Holdings and the sales of Bear Stearns and Merrill Lynch in 2008 led Kovacevich and Stumpf to rethink their stance.
Buffett’s imprimatur notwithstanding, Wells Fargo has a big hill to climb. The bank ranked 12th among U.S. debt underwriters in 2011, with 1,824 deals valued at $53.1 billion, behind London’s HSBC Holdings and France’s BNP Paribas SA. In U.S. mergers and acquisitions, Wells Fargo ranked 21st, advising on 31 deals last year valued at $27.6 billion.
Wells Fargo also will have to convince naysayers it won’t go the way of other commercial banks that have sought to enter the investment-banking business only to retreat, says Brian Foran, a New York analyst at Nomura Holdings Inc. Bank of America tried expanding into investment banking with limited success until it purchased Merrill Lynch, he said.
“Investors are nervous,” Foran said. “They feel like they’ve seen this movie before.”
This article appeared on page D – 4 of the San Francisco Chronicle
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2012年1月19日星期四
Why USB Is Up and PNC Is Down
This morning saw a slew of earnings from the financial sector. Here we take a brief look at the results from regional lenders US Bancorp (NYSE: USB ) and PNC Financial (NYSE: PNC ) .
Why US Bancorp is upShareholders of US Bancorp should be happy this morning. According to the bank’s press release, fourth-quarter earnings at the Minneapolis-based lender jumped 39%.
The bank’s net income increased $376 million to $1,350 million compared with net income of $974 million from the same period a year ago. This was on the back of an 8.1% year-over-year increase in net revenue.
In terms of the numbers more generally, three things stick out.
First, the bank’s average deposits grew by 17.3% over the same period a year ago — 11.7% excluding acquisitions.
Second, average total loans in the quarter grew by 5.9% over the fourth quarter of 2010. This was in line with results at Citigroup (NYSE: C ) , JPMorgan Chase (NYSE: JPM ) , and Wells Fargo (NYSE: WFC ) , three of the four largest banks in the country. Citi’s loans grew 14%. JPMorgan’s increased 4%. And Wells Fargo’s improved 2%.
Third, the bank set aside only $497 million in loan-loss provisions compared with $912 million a year ago. Indeed, in what hopes to be a harbinger of things to come for the broader economy, the bank’s total nonperforming loans decreased by a staggering $1 billion from the same quarter in 2010.
In terms of the balance sheet, the bank’s book value per share increased 14.4% to $16.43 a share. And its tier 1 common equity ratio, an important measure of a bank’s capital position, increased to 8.6% from 7.8% last year.
The bank also reiterated its commitment to returning a significant amount of its earnings to shareholders through dividends. While it currently returns 29% of its earnings through both dividends and share buybacks, its stated long-term goal is to do so with a “majority of our earnings.”
Why PNC Financial is down
Shareholders of PNC Financial won’t be similarly rejoicing, as fourth-quarter profits at the Pittsburgh-based regional bank plunged 42%. For the quarter, the bank reported earnings of $476 million, down from a year-earlier profit of $823 million. On a per-share basis, this equates to $0.85 and $1.50, respectively.
For the year, meanwhile, the bank reported net income of $3.1 billion, or $5.64 per share, a decrease of 8.8% compared with 2010 net income of $3.4 billion, or $5.74 per share.
According to the bank’s press release, a number of factors contributed to a decrease in fourth-quarter revenue from $3.9 billion in 2010 down to $3.5 billion in 2011. These included a nonrecurring $160 million gain realized in last year, as well as lower debit card and commercial service fees recorded this year.
The silver-lining to PNC’s results concerns the performance of its loans. The ratio of non-performing loans to total loans decreased 73 basis points to 2.24%, down from 2.97% from the year-ago period. And along these lines, the bank set aside $71 million less in provisions for credit losses.
In addition, the bank progressed on the balance-sheet front. Its book value per share increased 9.3% from $56.29 last year to $61.52 today. And its tier 1 common equity ratio improved to 10.3% from 9.8% last year.
Next upThe next big bank to report is Bank of America, which releases its fourth-quarter earnings on Thursday.
Here at The Motley Fool, it’s expected that the quarter may have been ugly for the nation’s second-largest bank by assets because of the size of its investment banking and global business. Indeed, despite growing their loan books, both Citigroup and JPMorgan Chase reported worse-than-expected results as a consequence of capital market exposure via these business segments.
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Why US Bancorp is upShareholders of US Bancorp should be happy this morning. According to the bank’s press release, fourth-quarter earnings at the Minneapolis-based lender jumped 39%.
The bank’s net income increased $376 million to $1,350 million compared with net income of $974 million from the same period a year ago. This was on the back of an 8.1% year-over-year increase in net revenue.
In terms of the numbers more generally, three things stick out.
First, the bank’s average deposits grew by 17.3% over the same period a year ago — 11.7% excluding acquisitions.
Second, average total loans in the quarter grew by 5.9% over the fourth quarter of 2010. This was in line with results at Citigroup (NYSE: C ) , JPMorgan Chase (NYSE: JPM ) , and Wells Fargo (NYSE: WFC ) , three of the four largest banks in the country. Citi’s loans grew 14%. JPMorgan’s increased 4%. And Wells Fargo’s improved 2%.
Third, the bank set aside only $497 million in loan-loss provisions compared with $912 million a year ago. Indeed, in what hopes to be a harbinger of things to come for the broader economy, the bank’s total nonperforming loans decreased by a staggering $1 billion from the same quarter in 2010.
In terms of the balance sheet, the bank’s book value per share increased 14.4% to $16.43 a share. And its tier 1 common equity ratio, an important measure of a bank’s capital position, increased to 8.6% from 7.8% last year.
The bank also reiterated its commitment to returning a significant amount of its earnings to shareholders through dividends. While it currently returns 29% of its earnings through both dividends and share buybacks, its stated long-term goal is to do so with a “majority of our earnings.”
Why PNC Financial is down
Shareholders of PNC Financial won’t be similarly rejoicing, as fourth-quarter profits at the Pittsburgh-based regional bank plunged 42%. For the quarter, the bank reported earnings of $476 million, down from a year-earlier profit of $823 million. On a per-share basis, this equates to $0.85 and $1.50, respectively.
For the year, meanwhile, the bank reported net income of $3.1 billion, or $5.64 per share, a decrease of 8.8% compared with 2010 net income of $3.4 billion, or $5.74 per share.
According to the bank’s press release, a number of factors contributed to a decrease in fourth-quarter revenue from $3.9 billion in 2010 down to $3.5 billion in 2011. These included a nonrecurring $160 million gain realized in last year, as well as lower debit card and commercial service fees recorded this year.
The silver-lining to PNC’s results concerns the performance of its loans. The ratio of non-performing loans to total loans decreased 73 basis points to 2.24%, down from 2.97% from the year-ago period. And along these lines, the bank set aside $71 million less in provisions for credit losses.
In addition, the bank progressed on the balance-sheet front. Its book value per share increased 9.3% from $56.29 last year to $61.52 today. And its tier 1 common equity ratio improved to 10.3% from 9.8% last year.
Next upThe next big bank to report is Bank of America, which releases its fourth-quarter earnings on Thursday.
Here at The Motley Fool, it’s expected that the quarter may have been ugly for the nation’s second-largest bank by assets because of the size of its investment banking and global business. Indeed, despite growing their loan books, both Citigroup and JPMorgan Chase reported worse-than-expected results as a consequence of capital market exposure via these business segments.
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Wells Fargo to Help Central Valley Customers Facing Mortgage Payment Challenges Wednesday and Thursday at Stockton Arena
STOCKTON, Calif.–(BUSINESS WIRE)– Wells Fargo & Company (NYSE:WFC – News) is hosting a free Home Preservation Workshop in Stockton for Wells Fargo Home Mortgage, Wells Fargo Financial, Wachovia Mortgage and Wells Fargo Home Equity customers facing financial hardships. Wells Fargo has invited more than 11,000 mortgage customers in the Stockton area to the two-day free workshop which will be held on Wednesday, January 18, 2012, from 2 p.m. – 8 p.m. and Thursday, January 19, from 9 a.m. to 7 p.m., at the Stockton Arena, Main Entrance, located at 248 West Fremont Street in Stockton. Parking is free.
More than 250 homeowners have registered and walk-ins are welcome to the Stockton workshop, the first of seven the company plans in California this year. Stockton is the 51st Home Preservation Workshop the company has organized since September 2009 where Wells Fargo home preservation specialists have met one-on-one with nearly 30,000 homeowners.
“Wells Fargo wants our customers to succeed financially and helping struggling borrowers find the options to help families stay in their homes in this difficult economy is a top priority,” said David Galasso, Wells Fargo’s Northern and Central California regional president. “This workshop gives Wells Fargo and Wachovia home mortgage customers, who are faced with payment challenges, the opportunity to meet face-to-face with our home preservation specialists to explore and discuss the options available for them.”
Approximately 75 Wells Fargo home retention team members – including bilingual specialists – will be on hand at the upcoming workshop to assist customers. Where possible, borrowers will receive a decision on a workout, loan modification, or other options, on site or shortly following the workshop. Options include Wells Fargo’s own loan modification program and the federal government’s Home Affordable Modification Program (HAMP).
How to Register for Wells Fargo Home Preservation Workshops in California
Following the Stockton Home Preservation Workshop, Wells Fargo will hold its next workshops of 2012 in San Diego (Jan. 25), Sacramento (Feb. 8-9), and Fresno, Calif. (Feb. 23). Walk-ins are welcome, but registration is strongly recommended in order to guarantee the ability to meet one-on-one with a representative. Sign up at www.wfhmevents.com/leadingthewayhome. For more information call 1-800-405-8067.
Customers across the country facing mortgage payment difficulties can also call 1-800-678-7986 for more information about potential options to avoid foreclosure.
About Wells Fargo’s Home Loans
Wells Fargo & Company (NYSE: WFC – News) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com), and other distribution channels across North America and internationally. With more than 272,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 23 on Fortune’s 2011 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.
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More than 250 homeowners have registered and walk-ins are welcome to the Stockton workshop, the first of seven the company plans in California this year. Stockton is the 51st Home Preservation Workshop the company has organized since September 2009 where Wells Fargo home preservation specialists have met one-on-one with nearly 30,000 homeowners.
“Wells Fargo wants our customers to succeed financially and helping struggling borrowers find the options to help families stay in their homes in this difficult economy is a top priority,” said David Galasso, Wells Fargo’s Northern and Central California regional president. “This workshop gives Wells Fargo and Wachovia home mortgage customers, who are faced with payment challenges, the opportunity to meet face-to-face with our home preservation specialists to explore and discuss the options available for them.”
Approximately 75 Wells Fargo home retention team members – including bilingual specialists – will be on hand at the upcoming workshop to assist customers. Where possible, borrowers will receive a decision on a workout, loan modification, or other options, on site or shortly following the workshop. Options include Wells Fargo’s own loan modification program and the federal government’s Home Affordable Modification Program (HAMP).
How to Register for Wells Fargo Home Preservation Workshops in California
Following the Stockton Home Preservation Workshop, Wells Fargo will hold its next workshops of 2012 in San Diego (Jan. 25), Sacramento (Feb. 8-9), and Fresno, Calif. (Feb. 23). Walk-ins are welcome, but registration is strongly recommended in order to guarantee the ability to meet one-on-one with a representative. Sign up at www.wfhmevents.com/leadingthewayhome. For more information call 1-800-405-8067.
Customers across the country facing mortgage payment difficulties can also call 1-800-678-7986 for more information about potential options to avoid foreclosure.
About Wells Fargo’s Home Loans
- Wells Fargo originates one in every four home loans in the country, and services one of every six.
- In the third quarter of 2011, more than 92 percent of Wells Fargo’s mortgage customers remained current on their loan payments.
- Since January 2009 through November 2011, the company had 724,710 active trial and completed modifications. Of those modifications, 84 percent were done through Wells Fargo’s own modification programs and 16 percent were through the federal government’s Home Affordable Modification Program (HAMP).
- As of the third quarter in 2011, Wells Fargo’s delinquency and foreclosure rates remain significantly below the industry average.
- Less than 2.0 percent of the loans secured by owner-occupied homes and serviced by Wells Fargo resulted in a foreclosure sale in the last 12 months.
- Just 7.63 percent of the first mortgage and home equity loans Wells Fargo services were past due or in foreclosure in the third quarter of 2011 compared to an industry average of 10.70 percent. Wells Fargo’s totals are down from a peak of 8.96 percent in the fourth quarter of 2009.
Wells Fargo & Company (NYSE: WFC – News) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com), and other distribution channels across North America and internationally. With more than 272,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 23 on Fortune’s 2011 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.
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2012年1月14日星期六
JPMorgan kicks off bank earnings season with 23% drop in profit
Reporting from Los Angeles and New York—
JPMorgan Chase & Co. kicked off bank earnings season with a 23% decline in profit and sagging revenue that investors saw as an ominous precedent for other big financial companies that report results next week.
An increase in consumer credit card usage and an uptick in business lending couldn’t offset weaknesses elsewhere at JPMorgan, Friday’s report showed. Investment banking, where revenue fell 30%, was particularly hard hit.
The report landed at a rocky time for markets, with global uncertainties including the European debt crisis restraining major corporate expansions and takeovers. Standard & Poor’s downgraded the debt of eight Eurozone countries Friday, stripping France and Austria of their prized AAA ratings.
Closer to home, major players in the mortgage business, like JPMorgan, continue to struggle with mountains of defaulted loans, foreclosed properties and demands that they repurchase flawed mortgages from government-controlled Fannie Mae and Freddie Mac as well as private investors.
Despite recent increases in commercial lending, JPMorgan officials say loan demand from solid businesses is spotty, leaving them with deposits overflowing — and open to accusations that they are too tightfisted after having been bailed out by the government. JPMorgan’s deposits rose 21% over the last year to $1.13 trillion.
“Companies are flush with cash and their cash balances are growing,” JPMorgan Chief Executive Jamie Dimon said during a call with bank analysts.
JPMorgan, the nation’s biggest bank, reported net income of $3.7 billion, or 90 cents a share, for the fourth quarter of 2011, down from $4.8 billion, or $1.12, a year earlier.
The profit was about as expected on Wall Street. But the bank’s quarterly revenue fell to $21.5 billion from $26.1 billion a year earlier, coming in well below analysts’ consensus forecast of $23 billion.
JPMorgan shares fell 93 cents, or 2.5%, to $35.92.
Since JPMorgan is the largest bank as measured by assets, and regarded as one of the best managed banks, investors reassessed their holdings across the board. Many banks stocks fell 4% in early trading. At the end of the day, Morgan Stanley declined 3.2% to $16.63, Bank of America was down 2.7% at $6.61, Citigroup fell 2.7% to $30.74 and Goldman Sachs slid 2.2% to $98.96.
An exception to the trend was Wells Fargo & Co., which closed the day unchanged at $29.61.
In a reversal of the situation immediately after the financial crisis, investors are betting on stronger showings from banks like Wells Fargo that have focused more on consumers than on trading.
The San Francisco bank, the largest bank as measured by stock market value, has seen its year-over-year earnings rise steadily. Analysts predicted that it would show a quarterly profit of $3.6 billion when it releases its results Tuesday, up from $3.4 billion a year earlier but down from $4 billion in the third quarter.
Bank of America Corp., which is in the middle of a major campaign to scale back risks and raise capital at the behest of regulators, was expected to reverse a loss of $1.2 billion in the fourth quarter of 2010 and report a profit of more than $2 billion Thursday.
Keefe, Bruyette & Woods analysts said JPMorgan’s loan loss and mortgage buyback numbers, while still high, had improved enough to be a positive sign for Bank of America. BofA shares have tanked 58% since last year as the Charlotte, N.C., bank has been hammered by tens of billions of dollars in losses from its 2008 acquisition of Calabasas home lender Countrywide Financial Corp.
Analysts have generally been growing more pessimistic about financial firms with big Wall Street trading operations, all of which will report their financial results in the next few weeks. New regulations and global financial turmoil have darkened the prospects for securities firms, making them one of the worst performing sectors on the Standard & Poor’s 500 index over the last year.
“We expect this quarter will be characterized more by limited activity and leverage across institutional investors and across corporations given the continued uncertainty in Europe and possible spillover effects in the U.S,” analysts at Keefe Bruyette & Woods wrote this week in a note to clients.
Last quarter, Goldman Sachs Group Inc. reported a loss for the first time since the financial crisis. Although Goldman is likely to bounce back to profit when it announces its results Wednesday, it is not expected to show any signs of growth.
Glenn Schorr, a bank analyst at Nomura Securities, said in a report that recent results “have investors wondering if GS has lost its ‘mojo.’”
scott.reckard@latimes.com
nathaniel.popper@latimes.com
JPMorgan Chase & Co. kicked off bank earnings season with a 23% decline in profit and sagging revenue that investors saw as an ominous precedent for other big financial companies that report results next week.
An increase in consumer credit card usage and an uptick in business lending couldn’t offset weaknesses elsewhere at JPMorgan, Friday’s report showed. Investment banking, where revenue fell 30%, was particularly hard hit.
The report landed at a rocky time for markets, with global uncertainties including the European debt crisis restraining major corporate expansions and takeovers. Standard & Poor’s downgraded the debt of eight Eurozone countries Friday, stripping France and Austria of their prized AAA ratings.
Closer to home, major players in the mortgage business, like JPMorgan, continue to struggle with mountains of defaulted loans, foreclosed properties and demands that they repurchase flawed mortgages from government-controlled Fannie Mae and Freddie Mac as well as private investors.
Despite recent increases in commercial lending, JPMorgan officials say loan demand from solid businesses is spotty, leaving them with deposits overflowing — and open to accusations that they are too tightfisted after having been bailed out by the government. JPMorgan’s deposits rose 21% over the last year to $1.13 trillion.
“Companies are flush with cash and their cash balances are growing,” JPMorgan Chief Executive Jamie Dimon said during a call with bank analysts.
JPMorgan, the nation’s biggest bank, reported net income of $3.7 billion, or 90 cents a share, for the fourth quarter of 2011, down from $4.8 billion, or $1.12, a year earlier.
The profit was about as expected on Wall Street. But the bank’s quarterly revenue fell to $21.5 billion from $26.1 billion a year earlier, coming in well below analysts’ consensus forecast of $23 billion.
JPMorgan shares fell 93 cents, or 2.5%, to $35.92.
Since JPMorgan is the largest bank as measured by assets, and regarded as one of the best managed banks, investors reassessed their holdings across the board. Many banks stocks fell 4% in early trading. At the end of the day, Morgan Stanley declined 3.2% to $16.63, Bank of America was down 2.7% at $6.61, Citigroup fell 2.7% to $30.74 and Goldman Sachs slid 2.2% to $98.96.
An exception to the trend was Wells Fargo & Co., which closed the day unchanged at $29.61.
In a reversal of the situation immediately after the financial crisis, investors are betting on stronger showings from banks like Wells Fargo that have focused more on consumers than on trading.
The San Francisco bank, the largest bank as measured by stock market value, has seen its year-over-year earnings rise steadily. Analysts predicted that it would show a quarterly profit of $3.6 billion when it releases its results Tuesday, up from $3.4 billion a year earlier but down from $4 billion in the third quarter.
Bank of America Corp., which is in the middle of a major campaign to scale back risks and raise capital at the behest of regulators, was expected to reverse a loss of $1.2 billion in the fourth quarter of 2010 and report a profit of more than $2 billion Thursday.
Keefe, Bruyette & Woods analysts said JPMorgan’s loan loss and mortgage buyback numbers, while still high, had improved enough to be a positive sign for Bank of America. BofA shares have tanked 58% since last year as the Charlotte, N.C., bank has been hammered by tens of billions of dollars in losses from its 2008 acquisition of Calabasas home lender Countrywide Financial Corp.
Analysts have generally been growing more pessimistic about financial firms with big Wall Street trading operations, all of which will report their financial results in the next few weeks. New regulations and global financial turmoil have darkened the prospects for securities firms, making them one of the worst performing sectors on the Standard & Poor’s 500 index over the last year.
“We expect this quarter will be characterized more by limited activity and leverage across institutional investors and across corporations given the continued uncertainty in Europe and possible spillover effects in the U.S,” analysts at Keefe Bruyette & Woods wrote this week in a note to clients.
Last quarter, Goldman Sachs Group Inc. reported a loss for the first time since the financial crisis. Although Goldman is likely to bounce back to profit when it announces its results Wednesday, it is not expected to show any signs of growth.
Glenn Schorr, a bank analyst at Nomura Securities, said in a report that recent results “have investors wondering if GS has lost its ‘mojo.’”
scott.reckard@latimes.com
nathaniel.popper@latimes.com
2012年1月6日星期五
How to Restore Communities Blighted by Subprime Loans
Hill’s latest book Reimagining Equality: Stories of Gender, Race, and Finding Home was published in October 2011.
(MORE: 25 People to Blame for the Financial Crisis)
To begin with, the $10,000 compensation some of the 200,000 Countrywide customers covered in the settlement are entitled to is likely not enough to put them back in their homes, let alone rebuild their neighborhoods. No one is more aware of this than Illinois Attorney General Lisa Madigan. Madigan’s investigation into Countrywide and Wells Fargo Bank began in March of 2008. From 2004 until 2007, at the height of subprime and high-cost lending, Countrywide was the state’s most prolific mortgage banker. During that same period, Wells Fargo aggressively embraced the increasingly lucrative subprime mortgage market as well. Madigan had been tipped off to huge disparities in the numbers of risky loans given to African Americans and Latinos by an investigation conducted by the Chicago Reporter. The Reporter found that African Americans, even those with six-figure salaries, were as much as three times more likely to get subprime or high-cost loans from the two lenders than whites or Asians and that the preponderance of those loans were given out in black and Latino neighborhoods. These practices, combined with the targeting of specific neighborhoods, wound up bankrupting poor working- and middle-class communities of color.
Madigan’s pleadings in a 2009 lawsuit filed against Wells Fargo outline how this discrimination siphoned off equity in neighborhoods until they became drags on municipalities and, over time, the state. Ongoing lawsuits against Wells Fargo in Baltimore and Memphis paint a similar picture and make clear the short-term and long-term negative impact of era’s lending tactics on the safety and security and the tax-based funding of schools in blighted neighborhoods. There is no reason to believe that Wells Fargo and Countrywide were the only banks engaged in such behavior.
Madigan flanked Holder at the news conference when he announced the settlement with Countrywide, which ends the state of Illinois claim against that bank. Yet, as she contemplated “the enormous amount of work that needs to be done to rebuild communities and our economy,” Madigan’s endorsement of the DOJ’s settlement agreement was understandably measured. Illinois’ suit against Wells Fargo continues. In it the state alleges that Wells Fargo broke a number of its consumer-protection and human-rights laws and asks for what could amount to much as $110,000 for every violation of credit and civil rights protections. Unlike the DOJ settlement, that compensates individuals, Baltimore and Memphis ask that a jury determine the amount of compensatory and punitive damages owed the cities for Wells Fargo’s actions.
(MORE: Hill: The Stories I Carry with Me)
Yet, even if Madigan and the cities of Baltimore and Memphis prevail, more needs to be done. Relief is in order for countless other cities which the DOJ acknowledges continue to suffer losses attributable to the reckless practices of lenders leading up to the foreclosure crisis. Ultimately, after the financial market collapsed, the government bailed out the banking industry, including Bank of America, which now owns Countrywide. The industry rebounded because the government concluded that a secure banking system was in the public’s interest. Yet, the playing field won’t be level as long as American communities pay for the corrupt decisions made by lenders. A federal effort targeted at restoring blighted neighborhoods is needed to clean up the mess left behind by such egregious predatory practices as those alleged in the Department’s reports and pleadings. The establishment of a pool of money, drawn from fines for violation of the laws and modeled after the Environmental Protection Agency’s Superfund, to be distributed by the DOJ in collaboration with state and local governments, is also in the public’s interest. The process for prioritizing communities set for restoration and structuring relief could be coordinated with other agencies under the DOJ’s direction.
Speaking before Congress in April 2011, Attorney General Holder acknowledged that “communities of all kinds, in every state, from coast to coast” have been touched by the foreclosure crisis. But Holder noted that “communities of color [had] been hit particularly hard, and [had] suffered greater consequences” as the basis for his establishment of the agency’s enforcement of fair housing laws. Funding to restore the neighborhoods Holder’s team of attorneys, economists and mathematical statisticians have identified would enhance the DOJ’s effectiveness as well as assist state and local governments currently dealing with costs associated with these sites. As importantly, it would show our federal government’s commitment to the protections enshrined in our Constitution and laws.
Hill, author of Reimagining Equality, is a professor of social policy, law and women’s studies at Brandeis University. The views expressed are solely her own.
2012年1月2日星期一
First Wind Names Michele Beasley as Senior Vice President and General Counsel
BOSTON–(BUSINESS WIRE)– First Wind, an independent U.S.-based wind energy company, today announced that Michele Beasley has joined the company as Senior Vice President and General Counsel. Ms. Beasley comes to First Wind with extensive experience in the development and financing of wind and other energy projects. In her role, she will oversee the company’s legal affairs and manage its legal team.
“We are excited to have Michele join our executive management team, which will benefit from her talent and experience,” said Michael Alvarez, President and CFO of First Wind. “Her expertise in the space is unparalleled and positions her perfectly to support our projects in operation and under development across the U.S. from the Northeast to the West and to Hawaii.”
Ms. Beasley most recently served as Senior Counsel at Wells Fargo Bank in San Francisco and Boston, serving as senior legal counsel to the Securities Investment Group of its division of Wholesale Division, supporting a multi-billion high-yield investment portfolio and large street- and customer-facing sales and trading groups. She served on the Securities Investment Risk Management and Firewall Committees, and represented commercial real estate financing teams.
Prior to Wells Fargo, Ms. Beasley spent more than a decade working on all aspects of the development and financing of energy projects at Orrick, Herrington & Sutcliffe LLP and Chadbourne & Parke, including the structuring, negotiation, and documentation of equity investments, project contracts, and third-party limited- and non-recourse financing, and related real estate and governmental approvals work. She also served as staff counsel to the then-new Women’s Rights Project of Human Rights Watch, under the Georgetown University Law Center’s Women’s Law and Public Policy Fellowship.
Ms. Beasley received her Bachelor of Arts from Smith College, and her Juris Doctor from Georgetown University Law Center. Ms. Beasley currently resides in Natick, MA.
About First Wind
First Wind is an independent wind energy company exclusively focused on the development, financing, construction, ownership and operation of utility-scale wind projects in the United States. Based in Boston, First Wind has wind projects in the Northeast, the West and in Hawaii, with the capacity to generate up to 735 megawatts of power and projects under construction with the capacity to generate up to an additional 141 megawatts. For more information on First Wind, please visit www.firstwind.com or follow us on Twitter @FirstWind.
http://tourism9.com/
“We are excited to have Michele join our executive management team, which will benefit from her talent and experience,” said Michael Alvarez, President and CFO of First Wind. “Her expertise in the space is unparalleled and positions her perfectly to support our projects in operation and under development across the U.S. from the Northeast to the West and to Hawaii.”
Ms. Beasley most recently served as Senior Counsel at Wells Fargo Bank in San Francisco and Boston, serving as senior legal counsel to the Securities Investment Group of its division of Wholesale Division, supporting a multi-billion high-yield investment portfolio and large street- and customer-facing sales and trading groups. She served on the Securities Investment Risk Management and Firewall Committees, and represented commercial real estate financing teams.
Prior to Wells Fargo, Ms. Beasley spent more than a decade working on all aspects of the development and financing of energy projects at Orrick, Herrington & Sutcliffe LLP and Chadbourne & Parke, including the structuring, negotiation, and documentation of equity investments, project contracts, and third-party limited- and non-recourse financing, and related real estate and governmental approvals work. She also served as staff counsel to the then-new Women’s Rights Project of Human Rights Watch, under the Georgetown University Law Center’s Women’s Law and Public Policy Fellowship.
Ms. Beasley received her Bachelor of Arts from Smith College, and her Juris Doctor from Georgetown University Law Center. Ms. Beasley currently resides in Natick, MA.
About First Wind
First Wind is an independent wind energy company exclusively focused on the development, financing, construction, ownership and operation of utility-scale wind projects in the United States. Based in Boston, First Wind has wind projects in the Northeast, the West and in Hawaii, with the capacity to generate up to 735 megawatts of power and projects under construction with the capacity to generate up to an additional 141 megawatts. For more information on First Wind, please visit www.firstwind.com or follow us on Twitter @FirstWind.
http://tourism9.com/
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