Barclays on U.S. Large-Cap & Mid-Cap Banks: Weekly Bank Briefing (12/19/11)
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Rating Summary:
31 Buy, 11 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 9 | Down: 12 | New: 19
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Barclays on U.S. Large-Cap & Mid-Cap Banks: Weekly Bank Briefing (12/19/11)
Analyst, Jason M. Goldberg, said, "Asset Growth: Per the Fed's H.8 from Friday (week ending Dec 7), loans rose (+$4.5bn) for the 4th time in 5 weeks. Balances ended the week at their highest level since May 2010 as all major categories advanced. R/E rose (+$10.4bn), led by mortgage (+$11.5bn) as CRE continued to bottom-out (-$0.1bn) and H/E ran-off (-$1.0bn). C&I gained (+$0.4bn) for the 19th time in 21 weeks. Consumer increased (+$1.1bn) with gains in card (+$0.9bn) and other (+$0.3bn). Period-end loans are up 1.2% QTD, while average balances are up 1.6% (+1.2% in 3Q). Cash (+$15bn) and trading (+$14bn) assets also increased. Securities dropped (-$17.4bn). Balances are up a slight 0.2% QTD, after a 5.0% jump in 3Q. Unrealized AFS gains declined (-$0.6bn) to a still elevated $21.7bn."
Capital Markets: With two (slow) weeks left in 4Q, investment banking fees, per Dealogic, are down 7% QTD at Citi (NYSE: C), 13% lower at Bank of America (NYSE: BAC) and down 19% at JPMorgan (NYSE: JPM). For the top 10, total IB fees are down 20%, with loan syndication (-38%), advisory (-28%) and equity underwriting (-2%) all lower and debt underwriting up slightly (+1%). For the week, the S&P 500 fell 3%, though it is still up 8% QTD. The MSCI World is up 4% QTD, while the BarCap Bond index is up 1%. After rising 22% in 3Q, QTD average daily equity volumes are 11% below the prior quarter. The VIX declined 8% last week, putting it down 43% QTD. Though the 3-month euro-dollar basis swap spiked to -147bps during the week, it finished Friday at -122bps, down 4bps from the prior week."
"Credit Quality: November credit card master trust data out last week, showed NCO's rose 70bps at C, increased 47bps at COF, were stable at JPM and improved 31bps at BAC. Loans 90+ DPD rose 1bp at both BAC and JPM, Capital One (NYSE: COF) was stable and C declined 3bps. The Fed said loan-loss reserves increased (+$0.6bn), marking its 4th advance in the past 6 weeks. Still, the reserve/loan ratio has held firm in the 3.14-3.15% area for 7 consecutive weeks (-$0.3bn, 4bps QTD)."
Analyst, Jason M. Goldberg, said, "Asset Growth: Per the Fed's H.8 from Friday (week ending Dec 7), loans rose (+$4.5bn) for the 4th time in 5 weeks. Balances ended the week at their highest level since May 2010 as all major categories advanced. R/E rose (+$10.4bn), led by mortgage (+$11.5bn) as CRE continued to bottom-out (-$0.1bn) and H/E ran-off (-$1.0bn). C&I gained (+$0.4bn) for the 19th time in 21 weeks. Consumer increased (+$1.1bn) with gains in card (+$0.9bn) and other (+$0.3bn). Period-end loans are up 1.2% QTD, while average balances are up 1.6% (+1.2% in 3Q). Cash (+$15bn) and trading (+$14bn) assets also increased. Securities dropped (-$17.4bn). Balances are up a slight 0.2% QTD, after a 5.0% jump in 3Q. Unrealized AFS gains declined (-$0.6bn) to a still elevated $21.7bn."
Capital Markets: With two (slow) weeks left in 4Q, investment banking fees, per Dealogic, are down 7% QTD at Citi (NYSE: C), 13% lower at Bank of America (NYSE: BAC) and down 19% at JPMorgan (NYSE: JPM). For the top 10, total IB fees are down 20%, with loan syndication (-38%), advisory (-28%) and equity underwriting (-2%) all lower and debt underwriting up slightly (+1%). For the week, the S&P 500 fell 3%, though it is still up 8% QTD. The MSCI World is up 4% QTD, while the BarCap Bond index is up 1%. After rising 22% in 3Q, QTD average daily equity volumes are 11% below the prior quarter. The VIX declined 8% last week, putting it down 43% QTD. Though the 3-month euro-dollar basis swap spiked to -147bps during the week, it finished Friday at -122bps, down 4bps from the prior week."
"Credit Quality: November credit card master trust data out last week, showed NCO's rose 70bps at C, increased 47bps at COF, were stable at JPM and improved 31bps at BAC. Loans 90+ DPD rose 1bp at both BAC and JPM, Capital One (NYSE: COF) was stable and C declined 3bps. The Fed said loan-loss reserves increased (+$0.6bn), marking its 4th advance in the past 6 weeks. Still, the reserve/loan ratio has held firm in the 3.14-3.15% area for 7 consecutive weeks (-$0.3bn, 4bps QTD)."
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