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Good Bank, Bad Bank: Wells Fargo's fourth-quarter results outshined Citigroup's, and the FT has not one, but two stories highlighting the banks' diverging fortunes. That's not counting the "Lex" column which does the same. All three articles contrast Citigroup's reliance on investment banking revenues (which have tanked across the sector) and emerging markets overseas to Wells' focus on "bread and butter" domestic commercial banking. However, the Times' Peter Eavis notes that Wells' results actually included $430 million of trading gains (in mortgages, equities and bonds) against a slightly larger trading loss the previous quarter. Remember that the old Wachovia/First Union sprawl, which included a sizable securities business, is now hitched to Wells' wagon. "Heard on the Street" in the Journal reports that Citi's shareholders "were particularly irked by the growth of expenses, which continues to outpace revenue." Citi's usual explanation - that it's investing for growth - has grown tiresome, the column says. But another article in the Journal notes an encouraging trend among all the megabanks that have reported so far - loan growth is the strongest it's been since the financial crisis.
Life's Too Short: John Kanas, who hoped to recreate his success at North Fork by buying and repositioning the failed BankUnited in Florida a few years ago, has had enough, anonymous sources tell the Journal. BankUnited is for sale, and TD Bank and BB&T have placed bids. Kanas is said to be tired and frustrated by regulations, low interest rates and a dearth of suitable takeover candidates (among the 50-odd banks BankUnited looked at), all of which have complicated the bank's growth plans. "BreakingViews" in the Times calls BankUnited's resignation an ominous sign for the industry. Rather than placing additional burdens on nimble banks like this one, the column opines, regulators "should be prodding the strong to capture the weak to form more medium-sized lenders capable of taking on customer-numb giants like Bank of America." If BankUnited is absorbed into a superregional, "competition will be forestalled" and other banks in its weight class may well cash out, too.
Oboy: "The World Bank has revised downward its global growth forecast for 2012, acknowledging that the world is in a precarious position under threat of a Lehman-like crisis engulfing capital markets," the Journal says. The bank warned developing nations their economies could be dragged down if the European sovereign debt crisis escalates. (Are you listening, Citigroup?) Wall Street Journal, Financial Times, New York Times
Wall Street Journal
Two more lawmakers have been fingered as "Friends of Angelo." One is a Democrat, the other a Republican. Well, Angelo Mozilo did always say when he was running Countrywide that he believed in the "macro hedge."
The FDIC released a proposal for stress-testing the 23 banks it oversees that have $10 billion or more in assets. All banks above that threshold are subject to these annual checkups under the Dodd-Frank Act.
New York Times
Columnist Joe Nocera is skeptical when he hears JPMorgan chief Jamie Dimon complain about complex, burdensome regulations. But longtime Washington financial-policy wonk Karen Shaw Petrou (a frequent contributor to American Banker's BankThink blog) has convinced Nocera that the new Rube Goldberg regime is, at the very least, doing nothing to stop another crisis.
"Deal Professor" columnist Steven M. Davidoff argues that the Federal Reserve is essentially a hedge fund. And it's been performing well. And its managers are way underpaid compared to the private sector!
Columnist Allan Sloan makes a case for mass streamlined mortgage refinancings.