Category Archive for "Financial"

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Apple vs. Banks in Mobile Payments: Update

The first media reports[1] appeared today of Apple’s discussions with retailers around a mobile payments system where payments are integrated into a premium shopping experience relying on wireless communication between iPhones and iBeacons (as piloted already in a few Apple

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WFC: The Bull Case by the Numbers

With WFC “at or near” its target capital model (bar some preferred issuance to meet liquidity requirements) and easing of two of the three margin headwinds (from the liquidity build and negative re-pricing of assets), the bank is well positioned

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Apple vs. Banks in Mobile Payments

Based on its patent filings, we expect Apple to extend its Passbook app (currently reserved for gift cards) so that it is compliant with EMV contactless and tokenization standards. This means customers, via their banks, can enable iPhones for mobile

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Quick Thoughts – WFC Investor Day: Shift to Mobile Creates Advantage for Large Banks

Beyond financial housekeeping (increasing the target payout ratio to 55-70% from 50-65%), an expression of confidence in the economy, and an intriguing glimpse into how the configuration of a branch network (siting, density, and layout) impacts the relative share of

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JPM: Earnings Power and Buyback Capacity Under-Estimated

With declining Treasury rates over the last few months and a first-quarter earnings miss, consensus 2015 EPS for JPM has fallen to just above $6.00 from $6.35 in March. This is overdone, and we expect the bank to beat comfortably

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Quick Thoughts – AXP: Releasing the Distribution Bottleneck will Lift ROE

Our thesis is that in 2016 Amex will raise its ROE target (currently 25% or more) as the Global Network and Merchant Services or GNMS business grows relative to the proprietary issuing business. Presently GNMS, which includes earnings from network

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Quick Thoughts – With Mercury Acquisition and Partnership with MSFT, VNTV Provides Critical Payments Capability to Next-Generation Retailer POS Platforms

The announcement yesterday by VNTV (market cap ~$4bn) of the acquisition of Mercury Payment Systems for $1.65bn solidifies its leadership position in providing “last mile” access to the point-of-sale (POS). This had been potentially threatened by the development of the

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Barclays: The Real Investment Bank Stands Up

Barclay’s investment bank represented ~55% of group equity but, on Thursday, management disclosed the more capital-intensive segments accounted for half of this and generated a mere 10% of investment-bank profits. With these segments consigned to a liquidating “bad bank”, the

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Quick Thoughts – Barclays: Smaller but More Profitable, and Worth Comfortably More than TBV

The 42% revenue decline in FICC to GBP1.23mm in 2014Q1, reported yesterday, is a poor showing on both an absolute and relative-to-peers basis (even allowing for Barclays tilt to rates vs. better-performing credit, the currency headwind from stronger sterling, and

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Payments: A Primer on Card Payment Security and the Target Precedent

The retirement of CEO Greg Steinhafel, apparently related to the Target data breach last November, is shocking. While the proximate cause of the breach was weak security in the POS systems, the ultimate cause is Visa’s desire to preserve the

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