Editor's Note: Morning Scan will not publish on Friday, April 18 in observance of the Good Friday holiday.
Receiving Wide Coverage ...
Big Investment Bank Earnings: Morgan Stanley's profits rose 18% year-over-year, thanks to a strong performance by its fixed-income division. Meanwhile, Goldman Sachs reported a drop in first-quarter profits, in part due to its fixed-income division. Goldman did, however, beat analyst expectations.
Capital One Earnings: Capital One's earnings rose 9.3% during the first quarter, largely due to setting aside less money for loan losses. Its revenue, however, similar to Wells Fargo and Citi, slipped 3%. The bank beat analyst estimates by about 26 cents per share. Wall Street Journal, Washington Post, American Banker
More Earnings: Huntington (dropped slightly); Fifth Third (fell); KeyCorp (rose); American Express (up)
B of A Earnings, Part Two: Heard on the Street's John Carney calls Bank of America's lackluster earnings a reminder that legal risks aren't a thing of the past. "The outsize litigation expenseit was equal to the bank's entire charge for 2013was another reminder that B of A continues to be haunted by the sins of the housing bubble," he writes. "Nor can investors be sure the bank has put all its legal woe behind it." The FT's Lex column adopted a similar stance and BreakingViews columnist Antony Currie echoed the sentiment of American Banker's Maria Aspan, who noted earlier this week: "Anemic results underscore how little fun it is to run a big bank these days." Meanwhile, Times columnist Peter Eavis had this to say about B of A's $950 million settlement with Financial Guaranty Insurance Company: "[It] indicates that, in some cases, the banks could have been made to pay more than they have."
Co-operative Group's Big Loss: Co-operative Group Wednesday reported a $3.86 billion full-year net loss, which is, at least in part, related to the near collapse of Co-operative Bank. The Group has yet to decide whether to "sink more money" into the bank, which it stills owns a 30% stake in, says the Journal. Notes the FT's Jonathan Guthrie in a Lombard column: "The Co-operative Group is good at arranging funerals. Just as well. Pessimists say it may need to arrange its own."
Another Yellen Reassurance: Federal Reserve chair Janet Yellen reiterated in a speech Wednesday that interest rates will remain low for some time, seemingly in an attempt to counteract that one time she suggested that they could go up in early 2015 and the market went a little cuckoo. New York Times, Washington Post
Wall Street Journal
More inside baseball, per anonymice, on the Fed's rejection of Citi's capital plan: "Divergent messages from different parts of the Fed were a major reason why Citigroup executives were taken aback when the bank's capital plan, which included dividend increases and more stock buybacks, was rejected on March 26."
Big banks are ramping up business lending. "Lenders
are making bigger bets on an economic expansion at a time when tighter regulatory restrictions on many banking functions have placed more importance on core lending activities to boost earnings," the paper notes.
New York Attorney General Eric Schneiderman has sent out "a first wave of subpoenas" to some high-speed trading firms as part of an investigation into whether they have an unfair advantage.
New York Times
Economist Simon Johnson's latest column advocates that big banks hold more capital
and offers this thought on financial innovation: "In retrospect, much of the financial innovation in the previous decades built up risk for the financial system in ways that were not properly understood by regulators or, arguably, by management at some of the largest banks."
