Category Archive for "Financial"

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Quick Thoughts – BAC Capital Tsunami: Expect Stock Buyback of over $10bn in 2015

Last night, the Fed announced its review of bank capital plans for 2014 (March through March), including BAC. BAC was approved to buyback $4bn of stock and raised the dividend to 5 cents/quarter from a token penny. BAC also announced

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AXP: Structurally Improving Business Model

The economics of AXP’s business model are improving meaningfully as it overcomes the anti-competitive constraints imposed by V and MA through the exclusionary rules (preventing Amex from distributing its network services through the bank channel) which were struck down by

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Quick Thoughts: Appeals Court Ruling on Debit will Galvanize MCX

Late Friday, an Appeals Court overturned a July-ruling from the District Court that the Durbin cap on debit interchange be lowered and that debit cards be activated for unaffiliated networks to handle signature-authenticated transactions (as opposed to the Federal Reserve

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Quick Thoughts: BAC/COF – Rising Net Interest Margins and Payout Ratios

Bank stocks have rallied sharply as the market interpreted comments on Wednesday by Fed Chairman Yellen that short rates would increase earlier than previously discounted. We continue to see BAC (up 4% over last two days) as the best play

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Barclays: At the Nadir

Barclays has lost 20% of its value since the beginning of the year as a result of two factors which will have no enduring impact: (i) a 10% increase in the 2013 bonus pool; and (ii) disappointing year-to-date results for

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Regional Banks: The Dynamics of Net Interest Margins at Selected US Banks

The role of CMA, MTB, and KEY as favored “asset sensitive” plays on rising rates leaves them over-valued relative to our regression model, and particularly to BAC and COF. Ironically, over the last 12-months BAC and COF were the only

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Bitcoin: Not a Bit and Not a Coin

The founding principle behind Bitcoin is to eliminate the need for, and hence cost of, intermediaries in a payments system. The two key functions of payments intermediaries are to process transactions securely and to mediate disputes. Bitcoin addresses the first

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Branch-Banking in the US: There’s an App for That

This note argues that the traditional role of branches, to provide secure transaction processing, will be taken over by apps not so much because banks are looking to reduce teller-costs but because the digital engagement of customers (whether in-branch, on-line,

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Quick Thoughts – Capital One Joins Bank-Owned Payment Network

COF announced yesterday that it had joined clearXchange, a bank-owned payment network founded by JPM, BAC, and WFC. clearXchange focuses on P2P payments (enabled using the recipient’s e-mail address or mobile phone number) and now covers half the addressable market;

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Barclays: Normalized Forward Dividend Yield of 4%

The negative sentiment around Barclays, and cyclical component of the downturn in investment banking, creates a buy opportunity. It is not without risk given the potential legal/regulatory costs associated with alleged manipulation of the libor[1]/currency markets, but investors are offered

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