FT Alphaville » bank of america

Another day, another BofA mortgage suit

Joseph Cotterill — Wed, 24 Oct 2012 16:54:53 +0000

Although actually, this is being touted as “the first civil fraud suit brought by the Department of Justice concerning mortgage loans sold to Fannie Mae or Freddie Mac,” directed at Countrywide/BofA. (Touted by the DoJ, of course)

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As good as… Moynihan

Joseph Cotterill — Fri, 04 May 2012 15:33:06 +0000

Spotted by the FT’s Shahien Nasripour in Bank of America’s latest 10-Q filing — a perfect positive trading record in the first quarter:

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Harp-ing on about mortgages and market share

Tracy Alloway — Fri, 04 May 2012 15:14:04 +0000

When the godfather of mortgage securitisation speaks, you listen.

This week Lewis Ranieri devoted a not insignificant amount of time from his Milken conference panelist discussion to Harp 2.0 — the US government’s refinancing programme for underwater mortgages.

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BofA’s stress scenarios

Joseph Cotterill — Fri, 17 Feb 2012 10:09:21 +0000

Bank of America told regulators last year that it would sell its Texas retail unit and offload its US Trust wealth management arm if forced to raise capital in a stressed market, says the WSJ. The Fed required BofA to submit the capital-raising plans last year, and the list will form part of this year’s US bank stress tests. BofA said it could issue common stock before selling these businesses. An exit from Texas would mark a milestone for BofA: it acquired its footprint there in 1989 during the Savings & Loan crisis, as its first major national acquisition.

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Paulson calls for Hartford split

Kate Mackenzie — Wed, 15 Feb 2012 03:35:48 +0000

John Paulson, the billionaire investor, has taken public his efforts to get The Hartford Financial Services Group to split into two companies, says the FT. The Hartford, like other insurers, has been under pressure in its life insurance business as interest rates hover near zero, making it difficult to generate the income to cover pay-outs on products like annuities. At the same time, it has participated in an industry-wide increase in pricing in its separate property and casualty business to make up for disaster-related losses last year. Mr Paulson, the largest shareholder in The Hartford with an 8.4 per cent stake, published a letter to the company on Tuesdayblaming its underperformance on the combination of its two businesses. He said it is too complex for analysts to properly value and that most other insurers have chosen to focus on one or the other business. Meanwhile Bloomberg reports Mr Paulson sold his entire stakes in Citigroup and Bank of America in the fourth quarter before the shares rallied. Paulson & Co, which owned $643m worth of Citigroup at the end of the third quarter, had sold its entire 25.1m shares as of December 31, the firm said on Tuesday in a filing with the SEC. He also sold $394m worth of Bank of America, or 64.3m shares. It also sold its 998,900 shares of BlackRock valued at $146m.

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BofA investor lawsuit wins class-action status

Kate Mackenzie — Tue, 07 Feb 2012 02:37:31 +0000

Investors suing Bank of America won class-action status for their lawsuit accusing the bank of fraudulently misleading them about the 2008 takeover of Merrill Lynch, reports Reuters. US District Judge P. Kevin Castel in Manhattan on Monday rejected the bank’s argument that the investors could not prove they suffered losses by relying on materially misleading statements or omissions. Among the other defendants who were also sued and opposed class certification were former Bank of America Chief Executive Kenneth Lewis, former Merrill Chief Executive John Thain, former BofA chief financial officer Joe Price, and Bank of America’s board of directors. The lawsuit consolidated litigation that had been brought nationwide, and names pension funds in Ohio, Texas, the Netherlands and Sweden as lead plaintiffs.

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Goldman leads US banks’ rush to sell bonds

Lisa Pollack — Fri, 20 Jan 2012 09:59:58 +0000

Goldman Sachs on Thursday sold its largest new bond issue on a standalone basis as other US banks rushed deals to market after reporting their earnings, reports the FT. Goldman sold $4.5bn in two parts by offering $4.25bn of 10-year debt at a risk premium, or spread, of 380 basis points over benchmark US Treasuries and reopening an existing note deal due in 2015 to add $250m. The deal was the bank’s largest, excluding bonds sold with federal government guarantees in the wake of the financial crisis, according to Dealogic. Citigroup, which has already sold five-year bonds this year, sold a rare 30-year issue at $1bn with a spread of 297bp over Treasuries. Bank of America sold $1.5bn of 10-year debt at a spread of 378bp. Last week, JPMorgan sold $3bn of 10-year bonds with a risk premium at 270bp. Banks are taking advantage of tightening bond spreads since the start of the year amid optimism that Europe is taking steps to solve the region’s problems and a generally benign earnings season for US banks.

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BofA swings to $2bn profit in fourth quarter

Kate Mackenzie — Fri, 20 Jan 2012 04:50:25 +0000

Bank of America pledged to accelerate the pace of building capital buffers to absorb future shocks as its fourth-quarter results helped drive its battered share price to the best level since October, the FT reports. The bank reported improved fourth-quarter net income of $2bn, compared with a loss of $1.2bn in the previous year as headline earnings per share of 15 cents modestly beat expectations and improved on a loss per share of 16 cents in the previous fourth quarter. BofA was a stock market laggard last year in a dismal sector as it struggled to escape from toxic mortgage losses and litigation, largely the result of its disastrous acquisition of Countrywide, the mortgage issuer, at the height of the crisis. Brian Moynihan, chief executive, has been shrinking assets to bolster capital levels and satisfy regulators. He said the company should reach a tier one common equity capital ratio – a key measure of balance sheet strength – of 7.25 to 7.5 per cent by the year-end, compared with an earlier target of 6.75 to 7 per cent. Shares in the company rose 2.3 per cent to $6.56, extending gains from mid-December lows.

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Four banks bidding on Maiden Lane II securities

Kate Mackenzie — Wed, 18 Jan 2012 04:31:30 +0000

Goldman Sachs, Barclays Capital, Bank of America and Credit Suisse were on Tuesday finalising bids for $7bn of mortgage-related securities that used to belong to AIG and are due to be auctioned later this week by the Federal Reserve Bank of New York, the FT reports, citing people familiar with the matter. The auction for the debt, which was acquired by the New York Fed as part of the bail-out of AIG in 2008, is scheduled to take place on Thursday, with BlackRock Solutions managing the sale. The four banks and the New York Fed declined to comment. The securities, which have a notional value of $7bn, are part of a $20bn portfolio housed in a special purpose vehicle called Maiden Lane II. T

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Pall cast over US bank results

Joseph Cotterill — Mon, 16 Jan 2012 09:22:40 +0000

JPMorgan’s fourth-quarter revenue miss has dampened the outlook for the banks reporting this week, who include Goldman Sachs, Bank of America, Citigroup and Morgan Stanley, the FT reports. Nevertheless, financial stocks have the highest predicted earnings growth rate – 24.3 per cent – in the S&P 500 index, according to FactSet, and the Federal Reserve is also expected to allow Citigroup to increase its dividend beyond one per cent. However, a round of cost-cutting is likely to come at Goldman and Morgan Stanley, following further tough trading and sparse business from clients in the last months of 2011.

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