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Bank Results Season: BofA, Is $9 billion = 90 cents?

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Not  a fair question. A rhetorical blogger , thank the blessed lord, he is as unemployed as a H1B holder from Mexico when there is no Coffee grown in California…

The etymology of the story aside when I compare the next hour’s announcement of $1.85 for Goldman Sachs and the JP Morgan profits of $3.3 billion with its large EPS paying for a good quarter while the government owned BofA is still a $98 bn in Market Capitalisation at a price of $9.72 from Monday

With an Equity Capital of $25.821 bln and shares outstanding of 10.133 bln, the annualised EPS on Common Equity comes to a loss of ($0.90). The number of outstanding equity shares has been a big drag on the banks reporting and operations with the government also asking the bank to stand down from reporting dividends

Goldman Sachs has a 562 mln shares outstanding in comparison for its $1.09 bln profit , an EPS of $1.85 and JP Morgan has 3.91 billion shares outstanding (period end) for a profit of $3.3 bln , an EPS of less than $1 but on the plus side.  The focus on EPS probably is the key reason why governments and the bank have drawn away from creating a recovery equation in retail that works with Wells Fargo following in tonight for a $1 EPS in profit for Q2 as well 

Countrywide’s purchase of $4 bln crossed a rubicon with a $8.5 bln settlement with SAGs and another $12 bln written down in expected losses (provisions) 30+ overdue in Mortgages and Home Equity (Residential) is still a hefty $4.3bln and $1.3 bln albeit holding Q1 levels

Results

Net loss after (preferred) dividends is $7.388 bln for the half year and wipes out last years Return on Equity of 10% or the Q1 gains of 5.5% & 0.36% on Average assets. Mortgage Banking (RFS) losses of $13.8 bln have been deducted from Revenue for the Net Revenue of $13.84 bln Total Deposits (33% interest bearing) closed at $1.05 tln with a $100 bln from international deposits

Card Services made the highest segment profit of $2 bln but Retail Financial Services booked $14.5 bln in losses as per new provisions and settlements made in the last few days. We expect investment sales in Blackrock and CCB to balance the excess losses in the next 2 quarters.

Investment Banking fee income also increased to $1.28 bln whle Net Interest Income stayed under the weather at less than 2.6% core income at $10.573 bln

Basel II Tangible common equity is already below 7% at 6.87%, but the bank avers to actively mitigating the Active cuts to be employed by the Basel III regime from 2014

The number of Employees is a hefty 287.000 across 5750 retail centers and has 17.817 ATMs Its Efficieny ratio on Interest income was a 75% in Q1 when it did not have losses netting its $27 bln revenue. In Q4 2010 it was a s high as 92%.

JPM in comparison employs 250.000 FTE across 5350 centers and nearly 17000 ATMs and a credit deposit ratio of 67% on deposits of $1.048 Tln. JP Morgan also has a much higher stockholders’ equity of $183 bln and Gold man Sachs $262 bln on a much smaller revenue base wih JPM comparable revenue at $5.4 bln ( GS is largely Corporate in terms of Exposures and does not compare in business models except for the investment bank which earn $1.5 bln ahead of BofA ML’s $ 1.684 bln JPM pre provision profits were a cool $10 bln compared to BofA’s 12 bln before $20 bln in new provisions 

 

Wells Fargo reports later today and the Goldman Sachs results are what you will see first when you visit this site in 5 minutes from now

 

Though the bank did not comment on litigation strategy its settlement of $8.5 bln ids likely t be used as basis for others settling with the State Attorney Generals and any other GSE litigation as well

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One comment on “Bank Results Season: BofA, Is $9 billion = 90 cents?

  1. Pingback: Bank results Season: Morgan Stanley gets a busy underwriting season | The Banking and Strategy Initiative

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