Financial Business Review: U.S. Bancorp, Wells Fargo and Blackstone Portfolio
U.S. Bancorp (NYSE:USB), Wells Fargo (NYSE:WFC) and Blackstone (NYSE:BX) are said to have purchased a portfolio of performing loans on U.S. properties held by German lender Eurohypo, for $740 million, according to sources, who add that each buyer will assume distinct ownership of individual loans.
Shares of Aetna (NYSE:AET) fall sharply in early trading, following a first quarter earnings report that showed too little surplus money in reserve for coverage of patient claims that are expected to come from earlier periods. An analyst for Leerink Swann remarked that “The elephant in the room is the lack of prior-period development. We’ve seen consistently for the entire industry that the medical-cost trend has come in below expectations, and it’s unclear why Aetna would be different.”.
Deutsche Bank’s (NYSE:DB) first quarter earnings posted a miss for net profit, with €1.38 billion falling considerably short of the consensus of €1.64 billion. No guidance was provided, but the bank’s report said that its conditions remain ‘challenging’, and that any economic recovery would mainly help U.S. banks. In addition, DB said that all its revenues from its investment banking unit were “flow driven” in that quarter. Espirito Santo calls that remarks ‘proof’ of the suspicion that reduced capital to trading operations has taken effect, and is also the probable cause for an 11 percent year-to-year decline in investment banking revenues, noting that “We believe this capital constraint will be a negative theme … going forward.”. Meanwhile, Deutsche, in a consortium with Barclays (NYSE:BCS), has purchased all of the MAX CDO holdings from a Maiden Lane III portfolio, from the Federal Reserve Bank of New York, in a competitive bid process that included 8 of the SIFIs.