Chillin' out till it needs to be funded
A new $10 B settlement by 14 banks to define and ordain penalties for foreclosure mispractices and abuses has been reached over the weekend bolstering markets rejoicing the newly made revenue arrangements to avoid the fiscal cliff. The Banks including Citi , BofA and JP Morgan would paying $3.75 B to foreclosures already completed in 2009-10 and the rest for those borrowers who are near being foreclosed on by banks. the agreement wwith the State Attorney Generals avoids another $300 M in fines requested by the Fed for careening into the crisis in 2008 yet makes the earnings season start bleak as Wells Fargo enjoys a rare first in presenting quarterly earnings updates this week, usually reserved for JP Morgan following Alcoa announcements.
Will Wells Fargo takeover the mantle from JP Morgan?
Q4 of course was not a big plus for banks with Hurricane Sandy and alimited plus effect from the housing recovery that had momentarily boosted incomes in Q1 and Q3 while the securitised RMBS and CMBS allong with High yield and structured Credit restart a broken comeback from the first half in 2013.
However, bank stocks are likely to start the upward climb soon with stress tests likely to be positive for all banks including BofA and Citi expecting to make larger payouts to woo investors and restart buy back programmes stopped because of inadequate Capital last year, after failing the stress test for Citi. The Fed will allow banks to rework Capital Plans in case they show them up as failed int his edition of the stress test checking for a high watermark of recession in China and lack of growth and continuing unemployment as its tenets to be tested int he worst case scenarios to be employed
Wells Fargo in the meantime hopes to showcase its near 40% share in mortgages and excellent profits to win a lasting lead from retail and institutional investors and traders in 2013.
Our Bank REsults Season posts tart this week till the Big 4 have reported and maps the explosion in bank stocks that has been missed in 2012