Part Four: A Glimpse at American Banks and Financial Institutions in 2012
• CitiCorp—Late in 2008, to many investors’ and politicians’ chagrin, CitiCorp accepted a monumental federal bail-out, numbering among the institutions dubbed “too big to fail.” Three years later, not only had the company emerged from receivership but it posted its seventh straight quarterly profit, including a 74 percent year-over-year increase in the third quarter, 2011. For the most part, CitiCorp has emerged from its 2008 difficulties, but it still faces litigation over mortgage-backed securities including allegations that it deliberately misled investors about the value and security of $1 billion in “derivatives,” the scheme that some analysts say made money from betting the bank would fail.
With operations in all fifty states and nearly 140 countries, CitiCorp commands 18% of the market and remains one of the nation’s premier credit card lenders. Parent company of the Travelers Insurance group with which it merged in 1998, CitiCorp has mitigated its real estate losses by streamlining global operations and promoting online banking. The company especially caters to multi-national and high net-worth customers. At the beginning of 2012, a slim majority of Wall Street analysts gave CitiCorp a “buy” rating.
• Wells-Fargo —With only 11 percent of the banks market share, Wells-Fargo nevertheless claims two distinctions: First and most notably, Wells-Fargo was the only major national mortgage lender to come through the 2008 housing nightmare unscathed, because it never relaxed banking policies, lending standards, or dabbled in mortgage-backed securities. Second, Wells-Fargo remains the nation’s largest consumer lender while it steadfastly stays out of the volatile investments markets. In the third quarter, 2011, the San Francisco-based giant posted $4.1 billion in profits, outperforming all experts’ forecasts. Just as importantly, Wells-Fargo stands out as the only one among the four mega banks to earn a “buy” recommendation from Wall Street’s top five investment firms.
Among United States banks, one other warrants serious attention. In the last several years, HSBC has emerged as the industry’s growth leader. Although it still lags well behind the top four banks in assets and market share, HSBC commands experts’ attention because of its record-breaking growth. Once a tiny household thrift known as “Household Finance Company,” HSBC has become an industry leader in consumer lending, and it has remained profitable by granting loans and credit cards to second and third tier borrowers, charging 7-to-10 percent above the prevailing rates as compensation for its risk. Given its steady increases in earnings and profits, HSBC has become a Wall Street favorite, and many analysts like the company’s pay-off prospects because it looks like a prime target for merger or take-over.
Search iFactFinders
A Glimpse at American Banks & financial institutions: Part three - J.P. Morgan Chase
Part three: A Glimpse at American Banks and financial institutions in 2012
• JP Morgan Chase—Although JP Morgan continues to struggle with fall-out from the 2008 meltdown and investor jitters about European defaults, the bank nevertheless posted $4.26 billion in profits during the third quarter, 2011, beating its own and Wall Street analysts’ forecasts. At the beginning of 2012, more than half of the nation’s leading investment advisors gave JP Morgan a “buy” rating.
With nearly $2.3 trillion in total assets, JP Morgan stands poised to over-take B-of-A as the nation’s leading financial institution; it already has more branches and more total deposits than B-of-A. Organized into six business segments-- Investment Bank, Retail Financial Services (RFS), Card Services (CS), Commercial Banking (CB), Treasury & Securities Services (TSS) and Asset Management (AM)—JP Morgan operates in all fifty states and sixty countries worldwide. It has maintained its market pre-eminence on the strength of strategic mergers and acquisitions. In the 1990s, JP Morgan consolidated New York’s four oldest banks, merging with Chase-Manhattan, which was founded by Aaron Burr, and then adding Chemical Bank and Manufacturers Hanover Trust. In 2004, JP Morgan crushed one of the nation’s up-and-comers, merging with Bank One in the nation’s largest ever corporate “marriage.” Early in 2009, the bank also acquired troubled west coast mainstay Washington Mutual.
• JP Morgan Chase—Although JP Morgan continues to struggle with fall-out from the 2008 meltdown and investor jitters about European defaults, the bank nevertheless posted $4.26 billion in profits during the third quarter, 2011, beating its own and Wall Street analysts’ forecasts. At the beginning of 2012, more than half of the nation’s leading investment advisors gave JP Morgan a “buy” rating.
With nearly $2.3 trillion in total assets, JP Morgan stands poised to over-take B-of-A as the nation’s leading financial institution; it already has more branches and more total deposits than B-of-A. Organized into six business segments-- Investment Bank, Retail Financial Services (RFS), Card Services (CS), Commercial Banking (CB), Treasury & Securities Services (TSS) and Asset Management (AM)—JP Morgan operates in all fifty states and sixty countries worldwide. It has maintained its market pre-eminence on the strength of strategic mergers and acquisitions. In the 1990s, JP Morgan consolidated New York’s four oldest banks, merging with Chase-Manhattan, which was founded by Aaron Burr, and then adding Chemical Bank and Manufacturers Hanover Trust. In 2004, JP Morgan crushed one of the nation’s up-and-comers, merging with Bank One in the nation’s largest ever corporate “marriage.” Early in 2009, the bank also acquired troubled west coast mainstay Washington Mutual.
A Glimpse at American Banks and Financial Institutions: Part two - Bank of America
Part two of A Glimpse at American banks and financial institutions in 2012
• Bank of America—The parent company of Countrywide Financial and Merrill-Lynch Securities, Bank of America has become synonymous with everything scandalous, insidious, dangerous and desperate in the meltdown of banking and the financial markets. Financiers and Wall Street Lawyers felt certain B-of-A’s acquisition of Countrywide and Merrill-Lynch would cement the august old bank’s pre-eminent position in every aspect of consumer and corporate finance, but Countrywide led the league in sub-prime mortgages, and Merrill-Lynch has produced a long string of investigations, lawsuits, and out-of-court settlements. In December, 2011, Justice Department officials announced B-of-A agreed to pay $335 million to Latino and African-American borrowers who paid higher rates and fees than whites with similar credit histories or were granted costly sub-prime loans when similar applicants received prime mortgages.
Tracing its history to the gold-rush days in San Francisco, Bank of America operates in all fifty states and forty different countries, and it commands nearly 22% of the domestic market. B-of-A’s consumer accounts and credit card operations have protected its market share, and officials reported late in 2011 they will offer $3 billion in common stock to increase the bank’s capital reserves and reduce its debt. Market analysts currently recommend investors hold their shares, but only seven of 35 give B-of-A a “buy” rating.
• Bank of America—The parent company of Countrywide Financial and Merrill-Lynch Securities, Bank of America has become synonymous with everything scandalous, insidious, dangerous and desperate in the meltdown of banking and the financial markets. Financiers and Wall Street Lawyers felt certain B-of-A’s acquisition of Countrywide and Merrill-Lynch would cement the august old bank’s pre-eminent position in every aspect of consumer and corporate finance, but Countrywide led the league in sub-prime mortgages, and Merrill-Lynch has produced a long string of investigations, lawsuits, and out-of-court settlements. In December, 2011, Justice Department officials announced B-of-A agreed to pay $335 million to Latino and African-American borrowers who paid higher rates and fees than whites with similar credit histories or were granted costly sub-prime loans when similar applicants received prime mortgages.
Tracing its history to the gold-rush days in San Francisco, Bank of America operates in all fifty states and forty different countries, and it commands nearly 22% of the domestic market. B-of-A’s consumer accounts and credit card operations have protected its market share, and officials reported late in 2011 they will offer $3 billion in common stock to increase the bank’s capital reserves and reduce its debt. Market analysts currently recommend investors hold their shares, but only seven of 35 give B-of-A a “buy” rating.
A glimpse at American Banks and Financial Institutions in 2012
Bank Rates, Mortgages and American Mega banks
Four major financial institutions control nearly three-quarters of America’s banking operations. In January, 2012, Bank of America, JP Morgan Chase, CitiCorp, and Wells-Fargo had $3.6 trillion in deposits; the remaining 46 banks in the world’s top fifty had combined deposits totaling $2.68 trillion. Together, the four mega banks command 70% of the United States market, and these big banks either operate in or have strong alliances with major banks in more 140 countries around the world. All four mega banks manage not only consumer accounts but also major corporate holdings, mortgage lenders, credit card operations, and government finance. Three of the four banks took extremely hard hits in the 2008 home mortgage meltdown; only Wells-Fargo Bank was unharmed. For the last seven quarters, however, all four banks have reported robust profits, and financial industry analysts predict they banks will continue to out-perform their earnings estimates.
Four major financial institutions control nearly three-quarters of America’s banking operations. In January, 2012, Bank of America, JP Morgan Chase, CitiCorp, and Wells-Fargo had $3.6 trillion in deposits; the remaining 46 banks in the world’s top fifty had combined deposits totaling $2.68 trillion. Together, the four mega banks command 70% of the United States market, and these big banks either operate in or have strong alliances with major banks in more 140 countries around the world. All four mega banks manage not only consumer accounts but also major corporate holdings, mortgage lenders, credit card operations, and government finance. Three of the four banks took extremely hard hits in the 2008 home mortgage meltdown; only Wells-Fargo Bank was unharmed. For the last seven quarters, however, all four banks have reported robust profits, and financial industry analysts predict they banks will continue to out-perform their earnings estimates.
Subscribe to:
Posts (Atom)