Chillin' out till it needs to be funded
While the 2011 Calendar raised our hopes, Q1 results are to set to prove JP Morgan into the lead in the Banking and Finance sector with Goldman Sachs also continuing consolidation in real time increasing presence in deals and losing place only in the Telco M&A deal it missed as Sprint did not do any deals in the period.
While the M&A scorecards are likely to turn empty as big deals go off the blackboard the banks are still looking to survive the entire new phase of re- regulation with fee based income lines and a lot in the Euro zone and out of London are further in trouble for having lost access to fee based businesses. New Capital norms are unlikely to impact any quarter’s results in 2011 either while outward M&A from Asia
Retail volumes are not really back for more and we are eagerly awaiting the results to see if reduction in loss provisions have finally been switched in this quarter and the next for real profits. JP Morgan though will keep shining, much less is known of the others especially Bank of America and Citi earnings unlikely to exceed 0.29 and l be down 10-15%. J P Morgan will still report a likely 60% bump to $1.16 following a $1.12 December 2010 as it continues a profitable streak even as BAC loses the battle with the government to pay a dividend
Lending quality will remain a focus in 2011 as NIMs(Credit Spreads) come under pressure in the big 4 and major banks in the US as in India while China published its competitive 2010 results just last week paving the way for less of bad loans and more of fresh business for ICBC and AgBank, CCB a little in trouble. Citi and Goldman Sachs publish early next week , the Indian banks ICICI Bank and HDFC Bank the week after with state promoted SBI. Wells Fargo and Morgan Stanley also report later next week with Blackrock and the other non banking giants.
Higher fees! no problem!!