Category Archive for "Financial"

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Quick Thoughts – MCX to Work with Paydiant on Tokenization to Improve Security

The Target data breach has probably pushed back the launch date for MCX pilots to the second half of 2014. It must be hard for merchants to stomach since, while consumers associate the breach with a failure of security at

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Quick Thoughts: Barclays – Numbers do not Support Negative View of the Investment Bank

I have rarely seen such a gap between strong management execution and negative market sentiment. Barclays stock is down nearly 7% after the full-year conference call in London this morning; the headline earnings number had come out yesterday and been

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Barclays: Expect Improved Guidance for Profitability and Leverage

With 2013 results and cost-cutting measures on Feb 11th, we expect Barclays to announce: (i) a 5-year target for a low-to-mid-teens return-on-equity replacing the current anemic target for a return in excess of the cost-of-equity, estimated at 11.5%, by 2016;

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V and MA: Quantifying Concentration and Disintermediation Risk

Conversion of the Chase consumer credit portfolio to V, which apparently had not begun in 2013, will represent a 2%+ headwind to global growth for MA in 2014 (and 6-7% headwind to US growth) assuming 80% of the portfolio migrates

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COF: Guidance Conservative; Reiterate 2015 EPS of $7.70 and $90 Price Target

We view COF’s guidance for 2014 pre-provision earnings (PPE) of $9.8bn as conservative and reiterate our 2015 EPS estimate of $7.70 (versus consensus of $7.33) and our price target of $90. Consensus appears to discount a flat net interest margin

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Mobile Wallets: Structural Advantage of MCX over Apple, Google, PayPal, and Square

Mobile wallets are on the cusp of mass adoption: the WSJ reports that AAPL is looking to allow consumers to use iOS mobile devices to pay for physical goods outside Apple stores with their iTunes accounts; Google Wallet will by-pass

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Quick Thoughts – V/MA: It’s the Routing Rules that Matter

On Friday, Visa rallied near 5% on oral arguments in front of an appeals court where judges appeared to support the Fed’s debit interchange cap of 21-24 cents/transaction in possible conflict with a district court ruling of end-July that the

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BAC: Room to Run as Rising Net Interest Margin Levers over Declining Expenses and Share Count

On the last earnings call, BAC guided to a tangible ROE of 14% “as we look out over three years” based on a 1% ROA and tangible equity/assets ratio “that’s just over 7%” (7.5% in the last quarter). In practice,

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Game of Loans: Impact of Credit Tie on Competitive Dynamics in US Debit

The relative outperformance of MA versus V since end-July, when a Federal District Court ruled in favor of dual-routing for signature debit, is hard to explain. It is likely predicated on a share shift in signature debit from V to

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Implications for Visa and FIS of Structural Change in US Debit

Given structural change in US debit, downside risks to Visa’s multiple in 2014 exceed upside risks: Growth: We expect growth estimates for network-switched bankcard debit in the US to be reset as checks, whose displacement has provided a secular tailwind,

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