Category Archive for "Financial"

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Quick Thoughts: MA – Beyond the Switch

MA is aggressively buying back stock with the payout ratio in 2014Q1 rising to 2x as the firm repurchased $1.7bn funded in part by an inaugural debt issue of $1.5bn (taking the debt-to-equity ratio to 22%). The repurchase of 21mm

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Quick Thoughts: BAC – Capital Restatement is a Bitter Pill, but Expect $15bn Stock Buyback in 2015

BAC is resubmitting its 2014 (“CCAR”) capital plan to the Fed after discovering an accounting error (related to structured notes acquired with Merrill in 2009) which reduces Tier 1 common capital at December 2013 by $3.7bn and the common-equity (“CET1”)

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Quick Thoughts: V – Cuts 2014 Revenue Guidance and Reorganizes for Merchant “Outreach”

V traded down over 4% in extended hours after delivering in-line results but lowering growth guidance for 2014 to single-digits (10-11% in constant currency with a 2% currency headwind); the firm cited weakness in cross-border volumes and a downshift in

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Quick Thoughts: Barclays – Moment of Truth

The market took in its stride Barclays pre-announcement that 20143Q1 profits would be lower than last year’s GPB1.79bn because of weak FICC revenues; the stock is up over 1% today at GPB2.52 and well above the GBP2.36 of March 11th

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US Banking: Mobile Banking Will Increase Scale Economies

Despite a strong rally off October 2011 lows, large-bank valuations remain attractive with WFC, JPM, and BAC trading at price-to-book multiples of 60%, 40% and 30% relative to the S&P500 – at or below the low-end of pre-crisis ranges. Valuations

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Quick Thoughts: Discover Checking Account Offers Durbin-Advantaged Rewards

DFS beat on EPS ($1.31 vs. $1.25 consensus) and continued to outpace the industry in loan growth (5% year-on-year in card and student, and 26% and 27% in private-student and personal lending respectively); with double-digit account growth in card, we

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Quick Thoughts: First Data Announcement Highlights Increasing Integration of Payments and Marketing

Yesterday, First Data (the leading US acquirer with 18% share – see below) announced the addition of support for loyalty marketing to its Clover platform which competes with Square Register, for example. Like Leaf from HPY and Square Register, Clover

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US Payments: A Primer on Merchant Acquiring

Merchant acquiring – the business of providing merchants with authorization for card payments and settling and clearing transactions, often but not always through the branded (including EFT) networks, so that funds are moved from the merchant account to the cardholder

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DFS: Capital, Opportunity, and Discipline

We estimate DFS has excess capital of $2.5bn (given that its 2015 Tier 1 common ratio is 8.7% under the CCAR severe-stress scenario, after the just-approved capital plan, versus a minimum requirement of 5% of risk-weighted assets that are currently

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No Free Lunch: A Primer on Interchange and Debit

This note comments on the WMT suit filed yesterday against Visa in the context of the broader impact of interchange on the structure of the card payments industry, particularly in debit. The dynamics are more involved than in many industries

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