Weekly Financial Biz Recap: Goldman Sachs and Citigroup Earnings, Settlements and Fines Galore
AIA Group — owned in part by American International Group (NYSE:AIG) — is considering a bid for ING’s (NYSE:ING) $6 billion Asian insurance operations, sources say. It has invited four banks to pitch for advisory roles for a potential offer, and the planned sale of the business is expected to draw heavy interest.
Goldman Sachs (NYSE:GS) and JPMorgan Chase & Co (NYSE:JPM) are among nine firms in which AFSCME (American Federation of State County and Municipal Employees) has filed proxy proposals to separate the roles of chairman and chief executive officer, because according to Lisa Lindsley, director of capital strategies, ”There hasn’t been enough adult supervision of Chief Executive Officers.” The public-sector labor union oversees a pension plan with $850 million and has a say in plans holding $1.7 trillion more.
First Cash (NASDAQ:FCFS) issues upside guidance for the fourth quarter. It saw earnings from continuing operations slightly ahead of Street expectations. It also says it has closed on the purchase of a chain of 29 pawn stores in Mexico for around $46 million in order to expand its presence in the country.
Capital One Financial (NYSE:COF) says credit-card delinquencies dropped in December. This lead to a decline charge-offs, and in December 30-day delinquencies dropped to 3.66% from 3.73% the previous month, and edged down to 5.18% from 5.22% internationally.
JPMorgan Chase & Co (NYSE:JPM) “has quietly ceased filing lawsuits to collect consumer debts around the nation … virtually shutting down a collections machine that … was racking up hundreds of millions of dollars in judgements,” according to American Banker. The credit card “robosigning” issue is 100 times bigger than with mortgages, argues one consumer advocate.
Bank of New York Mellon (NYSE:BK) reaches a partial settlement with government prosecutors over civil fraud charges related to client prices on forex trades. Prosecutors had sought hundreds of millions of dollars in penalties, but so far there is no mention of the amount of the settlement. However, talks are ongoing.
Goldman Sachs’ (NYSE:GS) fourth quarter investment banking revenue is down 43% year-over-year, but up 10% from the third quarter. Underwriting revenues are down 56% year-over-year, as well as compensation costs which dropped 21% year-over-year.
BancorpSouth (NYSE:BX) shares slide after the firm’s announcement of a $100 million secondary offering. The sale of shares represents close to 11% of the bank holding company’s market cap.
State Street (NYSE:STT) missed its earnings. It said in response that it would make further cost cuts at its capital-markets operations due to what it expects to be continued weakenss in global markets. Profits rose 4.4% to $454 million, though shares are down.
PNC Financial Services (NYSE:PNC) trailed the market after its fourth quarter earnings per share missed estimates. Profit nose dived down to 42% year-over-year as the lender continued to struggle with a decline in revenue and steep charges. One positive takeaway however, is that credit costs continue to fall with loan loss provisions totaling $190 million for the quarter. The loan losses are down significantly from $442 million the year before.
Investing Insights: Bank of America Corp Earnings: Swing to a Profit but Still Misses Estimates.
Citigroup (NYSE:C) has a unit that was fined $725,000. The tremendous fine was due to lapses in disclosure for thousands over a three-year period. Financial Industry Regulatory Authority (FINRA) cited over 9,000 lapses, most of which were “the result of programming and technical errors.”
Deutsche Borse and NYSE Euronext (NYSE:NYX) are cleared for the proposed merger by the Securities Exchange Commission. The agency found the merger would comply with securities laws and promote fair trading, even as European regulatory approval grows increasingly doubtful.
BlackRock’s (NYSE:BLK) fourth quarter beat on a per share basis fell short of revenue estimates, and profit dropped 16% year-over-year.
BankAtlantic Bancorp (NYSE:BBX) and its top executive mislead investors when the financial crisis was in its early stages, according to charges brought against it from the Securities Exchange Commission. CEO and Chairman Alan Levan, in response to the SEC case, says the charges are unsupportable and the agency is squandering public resources.
Doral Financial (NYSE:DRL) shares are up on news the banking company turned a profit in the fourth quarter. They cited better net interest margins and a reduction in non-performing assets.
SunTrust (NYSE:STI) fourth quarter profit was hobbled by $636 million in mortgage repurchase demands, up 45 percent from the third quarter. Suntrust confirms its involvement in settlement discussions with state attorneys general, but doesn’t book a charge. Repurchase losses were greater than anticipated but “manageable,” with essentially “solid” results, say Sanford Bernstein analysts.
Comerica (NYSE:CMA) fourth quarter earnings posted better than expected. A better overall loan portfolio compensates for flat year-over-year earnings growth caused by merger-related charges.
Investing Insights: Capital One’s Weak Earnings Noticed by Nomura.