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’Bank of America reports, confuses, wins and loses
Listening to Bank of America’s Q3 earnings call reminded us of this sweary scene (5:46 onward) from BBC comedy the Thick of It:
“What we do is we overcomplicate…stats, percentages, international comparisons,
“This is really getting nuts”
A fair summary of recent Bank of America events, from Gary Lynch, the bank’s top attorney.
The quote is from this week’s Bloomberg Businessweek cover story, which asks whether Brian Moynihan can stop the rot at the troubled bank (click below to read the piece):
Kickback and relax with the mortgage reinsurance scandal
Jeff Horwitz has a cracking story in Tuesday ‘s American Banker on a previously undisclosed report by the Inspector General of the Department for Housing and Urban Development (HUD) into allegations that US banks took lucrative kickbacks from mortgage insurers.
The Bank of America “de-layering” bloodbath
Well, this is one way of trying to show that you’re in control and that Merrill Lynch is absolutely, totally, honestly, really, not going anywhere.
Here’s the top of the statement released by BofA on Tuesday evening:
What price the banks’ FHFA lawsuit losses?
The lawsuits filed on Friday by the Federal Housing Finance Agency against 17 global banks involved nearly $200bn of mortgage-backed securities but the regulator refused to put a figure on the total losses it was seeking to recover.
Will Dow Jones please return five minutes of our time
Compare:
BOfA Merrill-Lynch Distributing Sales Docs Among Bidders-Source
Contrast (minutes later):
Bank of Spain’s advisor in the sale, Bank of America Merrill Lynch is distributing sales documents w/ potentially interested bidders.
Fannie and Freddie’s revenge — the details [updated]
– By John McDermott and Cardiff Garcia
The details of the US government’s attempted bank raid are coming in on Friday afternoon.
The Federal Housing Finance Agency has filed 17 lawsuits against banks operating in the US.
BofA’s Merrill Lynch ETF
Warren Buffett’s Bank of America warrants are perilously close to out-of-the-money territory on Friday.
Shares in everyone’s favourite lawsuit piñata were trading at $7.22 (down 8.72 per cent) at pixel time.
US government attempts bank raid
Friday promises to be an ugly day for US financials:
Stories in the New York Times the Wall Street Journal on Friday suggest that a grand mortgage settlement is farther away than ever and that banks — or at least one bank (guess which!) — are coming under increasing pressure to prepare for the worst.
Buffett’s $1bn day at the office [updated]
Don’t call it a bail-out.
Our apologies for another BofA post but analyst reaction has been coming in and though most it can be summed as “confidence boost that changes little”, we think there’s a couple of extra points worth mentioning.
Buffett’s bargain BofA deal
By John McDermott, Cardiff Garcia, and Joseph Cotterill
BofA’s Buffett bounce was at 13 per cent at pixel time, paring gains from a 20 per cent high earlier on Thursday. Part of this may be due to a reverse torpedo-like situation, according to the experts at Data Explorers.
Woah, BAC up
Well, Warren Buffett did say he wanted to pay higher taxes, and we suppose his investment into Bank of America resembles something like a boon to Treasury, even if it’s just a sense of relief.
A quick market reaction while we get a grip on this:
Bank of America – not Citi and not being bought by JPM
Turns out that some banks don’t need sovereigns to create their own funding loop problems.
Not for the first time, Bank of America is in a league of its own.
It’s a quick point made by Marc Ostwald of Monument Securities on Tuesday,
JPMorgan says BofA may need a capital raise
No, not that it’s about to buy the bank in an earthquake-causing deal.
But in a short note published on Tuesday, JPMorgan did upgrade BofA from underweight to neutral, explaining that the pressures on the bank “may actually increase the chances of a credit-positive development,
Good morning Bank of America
(Fall, then…) rise and shine:
BofA’s stock was still down around 2 per cent at pixel time, following an 8 per cent decline on Monday. There’s a worrying relationship between its stock and credit at the moment,
The Bank of America explanation game
Who wants to play our Bank of America game?
Be your very own markets reporter by filling in the blank in the mock lede below. Bonus points for use of the words “swoon”, “pare”, “checked”, “fears” and “rumours”.
Flat BAC
Seems the only way to describe Bank of America’s CDS curve after Monday’s (margin?) disaster. Citi appended for contrast:
One-year BAC CDS jumped from 99bps to 285bps, according to Markit data. Well.
Rocky Balboa
FT Alphaville was all set to work through the early morning examining the release of allegedly damning documents relating to the actions of Bank of America Merrill Lynch or its subsidiaries in the ongoing struggle to provide settlements in the foreclosure crisis.
BofA repays Tarp debts
Bank of America has fully repaid the US government the $45bn in aid it gained in the financial crisis, the bank said on Wednesday, reports Reuters. The bank sent the US Treasury a mix of cash from its corporate coffers and money raised as part of a $19.29bn securities offering earlier this week to settle its outstanding TARP debt.
BofA raises $18.8bn
Investors on Thursday welcomed Bank of America’s move to raise $18.8bn to repay $45bn of bail-out funds, as relief at its escape from official curbs on compensation and operations outweighed concerns over the huge share issue.
Citi strains against official curbs
Citigroup is set to intensify efforts to break free from US government curbs on pay and management following Bank of America’s decision to return $45bn in bail-out funds. BofA’s move, revealed on Wednesday,
BofA to repay $45bn in Tarp funds
Bank of America is to repay $45bn in US bail-out funds in a dramatic step to escape the heightened government supervision that accompanied its rescue from the financial crisis. BofA will use $26.2bn of its own cash and raise an additional $18.8bn in the markets from Thursday through the sale of stock in the largest ever capital-raising by a US bank.
Hershey, Ferrero plot Cadbury bid
US chocolate giant Hershey is considering launching a bid for Cadbury – possibly in partnership with Italy’s Ferrero – that could help the UK confectioner fend off a hostile takeover by Kraft Foods,
BofA director: Merrill deal a ‘mistake’
One of Bank of America’s leading directors described the acquisition of Merrill Lynch as a “bad mistake” that the bank was “pressured” into completing by the government, according to an email turned over to a congressional committee.
Ex-HSBC HK executive pleads guilty
Former HSBC executive Chen Ching-hsiao pleaded guilty to charges that he accepted a $60,000 bribe from a client seeking credit facilities, reports Bloomberg. The former senior vice president at HSBC’S commercial- banking department said “yes” when asked if he was pleading guilty at the Hong Kong District Court on Friday. Chen faces up to two or three years in prison,
Goldman, BofA chiefs on defensive
Goldman Sachs pays its employees more than other financial groups because its employees are more productive, Lloyd Blankfein, Goldman CEO, told a banking conference on Tuesday. Blankfein said that people
Fund urges BofA to seek external CEO
A Texas fund that owns more than 1m shares in Bank of America on Tuesday renewed its call for the bank’s board to look at outside candidates to replace CEO Ken Lewis, who will step down at the end of the year.
BofA approached BNY Mellon CEO
Bank of New York Mellon chief executive Robert Kelly was recently approached about taking the CEO position at Bank of America but has shown no interest in the job, the WSJ reported. Kelly was approached more than once about potentially succeeding incumbent CEO Kenneth Lewis,
BofA to sell First Republic Bank
An investor group led by two buy-out firms, Colony Capital and General Atlantic, is buying First Republic Bank from Bank of America for more than $1bn. Colony and General Atlantic will each have 24.9% of the equity,