Author Topic: BAC-WT - Bank of America Warrants  (Read 2071564 times)

Spekulatius

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Re: BAC-WT - Bank of America Warrants
« Reply #7250 on: June 05, 2018, 03:44:29 PM »
I think one must distinguish between the impact of the Great Recession and reforms on banks vs individuals. It is now clear that the ECB didn’t get the banking system reformed correctly, causing a dwelling crisis. Depending on location and country, the impact was quite felt different.

In Germany, the global financial crisis was felt as a swift decline followed by a quick recovery. As early as 2009, the Recession was over, wealth effect was negligible, because most Germans don’t own stock and real estate didn’t go down much at all. That is why so many Germans have difficulty to understand why other have a problem. There is very little symphaty for people, institutions or countries who borrow and then get into problems. Whether than is a correct viewpoint is an entirely different matter. It also doesn’t matter to the average German , if Deutsche  Bank goes to the crapper - deposits are insured and the banking systems backbone Sparkassen and Volksbanken (owned by local government or mutual organization).


This is very different from individuals who love in Ireland, Spain, Italy or worst of all Greece, who live now through a decade of economic stagnation (Spain is actually recovering nicely). I feel the ECB with their politic keeps the banking System afloat, but also keeps it from mending itself, which makes it a difficult sector to invest in. I do think that a selloff because of Italy will probably be a buying opportunity (except for Italian banks), since I think foreign banks have abstained from buying Italian treasuries after the first crisis a couple of years ago. So, maybe there is an opportunity to Maske a nice trade in the near term future.
To be a realist, one has to believe in miracles.


gary17

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Re: BAC-WT - Bank of America Warrants
« Reply #7251 on: June 06, 2018, 07:47:53 AM »
RBC's 2018 CCAR estimates-

John Hjorth

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Re: BAC-WT - Bank of America Warrants
« Reply #7252 on: June 06, 2018, 08:49:59 AM »
Thank you a lot for sharing, Gary.
”In the race of excellence … there is no finish line.”
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Viking

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Re: BAC-WT - Bank of America Warrants
« Reply #7253 on: June 13, 2018, 03:06:40 PM »
The Fed meeting today had more good news for the big US banks. The announced 25 basis point increase in the Fed Funds rate will improve net interest income and profitability immediately. More importantly, the Fed increased its projections for GDP growth for 2018. Stronger GDP growth will result in stronger earnings. The ‘story’ continues to get better for the big US banks...

http://www.calculatedriskblog.com/2018/06/fomc-projections-and-press-conference.html
« Last Edit: June 13, 2018, 03:45:05 PM by Viking »

Viking

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Re: BAC-WT - Bank of America Warrants
« Reply #7254 on: June 13, 2018, 03:28:19 PM »
BAC presented June 12 at the Morgan Staley Financials Conference. Focus was their US consumer bank (38% of net income). Very impressive what they have done the past 5 years; they look like they may be leading in the shift to electronic/digital/mobile. I wonder if BAC currently has the strongest consumer bank in the US? Better then JPM and WFC? What do US board members think?

http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-irhome#fbid=dJ132liOj51i

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDA2Nzk0fENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636643429722332975

- 36 million active digital users; total of 67 million customers.

https://bankinnovation.net/2018/01/chase-citigroup-display-strong-mobile-user-growth-as-wells-fargo-growth-dips/

« Last Edit: June 13, 2018, 03:36:10 PM by Viking »

Cigarbutt

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Re: BAC-WT - Bank of America Warrants
« Reply #7255 on: June 13, 2018, 03:56:49 PM »
The Fed meeting today had more good news for the big US banks. The announced 25 basis point increase in the Fed Funds rate will improve net interest income and profitability immediately. More importantly, the Fed increased its projections for GDP growth for 2018. Stronger GDP growth will result in stronger earnings. The ‘story’ continues to get better for the big US banks...

http://www.calculatedriskblog.com/2018/06/fomc-projections-and-press-conference.html

I think I see what you mean (when higher growth will manifest and when it will be recognized by markets?) but the wording implies forecasting enthusiasm.
https://www.frbsf.org/economic-research/publications/economic-letter/2015/february/economic-growth-projections-optimism-federal-reserve/

The point of this specific post is not that the FED is over-optimistic; it's just that it may represent a neutral input as GDP may end up lower or higher.

Spekulatius

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Re: BAC-WT - Bank of America Warrants
« Reply #7256 on: June 13, 2018, 04:15:18 PM »
BAC presented June 12 at the Morgan Staley Financials Conference. Focus was their US consumer bank (38% of net income). Very impressive what they have done the past 5 years; they look like they may be leading in the shift to electronic/digital/mobile. I wonder if BAC currently has the strongest consumer bank in the US? Better then JPM and WFC? What do US board members think?

http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-irhome#fbid=dJ132liOj51i

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDA2Nzk0fENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636643429722332975

- 36 million active digital users; total of 67 million customers.

https://bankinnovation.net/2018/01/chase-citigroup-display-strong-mobile-user-growth-as-wells-fargo-growth-dips/

I believe that from a consumer perspective, BAC and JPM are the strongest franchises. WFC branches were better managed IMO (not sure now, since it has been 3 years since I was in one), but their online presence feels really dated.
To be a realist, one has to believe in miracles.

Viking

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Re: BAC-WT - Bank of America Warrants
« Reply #7257 on: June 13, 2018, 08:34:50 PM »
The Fed meeting today had more good news for the big US banks. The announced 25 basis point increase in the Fed Funds rate will improve net interest income and profitability immediately. More importantly, the Fed increased its projections for GDP growth for 2018. Stronger GDP growth will result in stronger earnings. The ‘story’ continues to get better for the big US banks...

http://www.calculatedriskblog.com/2018/06/fomc-projections-and-press-conference.html

I think I see what you mean (when higher growth will manifest and when it will be recognized by markets?) but the wording implies forecasting enthusiasm.
https://www.frbsf.org/economic-research/publications/economic-letter/2015/february/economic-growth-projections-optimism-federal-reserve/

The point of this specific post is not that the FED is over-optimistic; it's just that it may represent a neutral input as GDP may end up lower or higher.

Cigarbutt, I agree that since 2008 the Fed has been a chronically too high with its forecasts. It looks to me like we may have reached an inflexion point where forecasts now are too low (not just GDP but also inflation) and future revisions will be higher. Lots to learn in 2H 2018. :-)

The US economy looks like it is running pretty much perfect right now. It is allowing the Fed to normalize interest rates and unwind QE. Simply amazing, especially when compared to the Euro Zone and Japan; what are these two going to do when the next recession hits in a couple of years?
« Last Edit: June 13, 2018, 08:41:55 PM by Viking »

racemize

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Re: BAC-WT - Bank of America Warrants
« Reply #7258 on: June 14, 2018, 12:08:06 AM »
BAC presented June 12 at the Morgan Staley Financials Conference. Focus was their US consumer bank (38% of net income). Very impressive what they have done the past 5 years; they look like they may be leading in the shift to electronic/digital/mobile. I wonder if BAC currently has the strongest consumer bank in the US? Better then JPM and WFC? What do US board members think?

http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-irhome#fbid=dJ132liOj51i

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDA2Nzk0fENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636643429722332975

- 36 million active digital users; total of 67 million customers.

https://bankinnovation.net/2018/01/chase-citigroup-display-strong-mobile-user-growth-as-wells-fargo-growth-dips/

This isn't exactly on point, but I remember Berkowitz talking about BAC's potential in 2010 (I think?) and that it could potentially out Wells Fargo Wells Fargo.  I think he was referring to the deposit franchise.  As an exercise, I went and looked at total deposits and the interest cost of those deposits for the big 4:

   Deposit Interest Expense   Average Deposits   Cost
BAC   1.93                            1309                           0.15%
C       6.585                           960                           0.69%
JPM   2.857                           1443                           0.20%
WFC   3.013                           1305                           0.23%


I think JPM's deposit mix is quite different than BAC/WFC though--not sure how it will hold up in rising interest rate environments.

Rasputin

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Re: BAC-WT - Bank of America Warrants
« Reply #7259 on: June 21, 2018, 02:05:06 PM »
DFAST 2018 results are out

https://www.federalreserve.gov/publications/files/2018-dfast-methodology-results-20180621.pdf

Only 1 participant out of 35 firms MADE (not lost) over $10 B pre-tax over the 9 quarter severely adverse scenario period.  GS, MS were hit severely, GS is only 0.1% to minimum SLR before capital ask...