NIM

Banks Are Getting Battered

US financials stocks are down 3% from Friday's exuberant post-earnings opening highs. That is the biggest drawdown since the election with BofA, JPMorgan, and Goldman leading the downturn (down almost 5% from Friday's opening highs)...

JPM Earnings Jump On Slashed Expenses, FICC Trading Beats As Equity, IB Misses; Credit Card Charge-Offs Spike

In a report that was somewhat similar to that of Bank of America,  JPM reported Q4 revenues of $23.4 billion, beating estimates of $23.1 billion, on EPS of $1.71, far higher than the expected $1.42, which however like in the case of BofA was due to a cut in expenses, which came in at $6.87 billion, far below the $7.2 billion, suggesting even greater expense - i.e. compensation - reductions.

Previewing Next Week's Main Event: What Will The BOJ Do? (Spoiler Alert: Probably Nothing)

At the BOJ's next Monetary Policy Meeting on September 20-21, the Central Bank will conduct a “comprehensive assessment” of trends in economic activity and prices under the current policy framework, as well as the policy impact, with a view to achieving its 2% price stability target at the earliest possible time. Here is what to expect from next week's main event.

US Bank Stocks Surge To 2016 Highs Despite Collapse In Yield Curve To 9 Year Lows

US bank stocks are exuberantly listening to mainstream media pushers as the hopes of a double-rate-hike-rainbow has sent S&P Financials to their highest since Dec 2015. However, despite the rise in implied rate-hike odds, the Treasury curve is utterly collapsing (which is what really matters for NIM) with 2s30s now at its lowest since 2007...

Frontrunning: July 18

  • Global stocks rise on SoftBank bid for ARM, dollar up vs yen after Turkey crushes coup (Reuters)
  • U.S. backs justice for coup plotters but urges Turkey to keep rule of law (Reuters)
  • Law and Order Will Be a Big Republican Convention Them (WSJ)
  • SoftBank to buy UK chip designer ARM in $32 billion cash deal (Reuters)
  • Rate-starved U.S. banks happily gobble mortgage business (Reuters)

Bank of America Profit Tumbles 19% As NIM Hits Record Low, EPS "Beat" On Surge In Cost-Cutting

Moments ago Bank of America joined the parade of "beating" banks despite declining earnings, when it reported adjusted Q2 EPS of $0.37 (excl. DVA), "higher" than a sharply reduced in recent weeks consensus estimate of $0.33, even as profits tumbled 19% from the $0.45 a year ago on sliding revenues of $20.6 billion ($20.4bn reported), vs consensus of $20.4 billion: the top line was $1.6 billion lower than a year ago if $0.9bn higher than Q1.

When Energy Loans Go Bad: Why America's Largest Bank Is Sliding

Wells' long overdue admission that it is woefully under-reserved for what may be a deluge of loan defaults should oil fail to rebound strongly... and certainly if oil continues to decline, has finally arrived in the form of this chart showing its LTM loan loss provision expense. It is, in a word, soaring.