Category Archive for "Financial"

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BAC: Closing the Margin Gap with WFC

Over the last three years, the net interest margin at BAC has risen from 64% to 72% of that reported by WFC (with the corresponding figures being 80% and 90% if we adjust for the adverse impact of BAC’s trading

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Quick Thoughts – FIS/MCX: Access to ACH

A risk to the thesis in the attached note that FIS will offer lower-cost routing (4 cents/transaction of which 2 cents is to be paid to banks to contribute to the cost of an ACH-enabled debit) for MCX than Visa

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FIS: The MCX Opportunity for PayNet

FIS will allow merchants participating in the MCX payments system (which we expect to pilot in 2014Q1 and roll-out nationally before year-end) to accept card payments for an all-in cost of 4 cents/transaction versus the network fees charged by Visa/MasterCard

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COF: Capital Generation and Digital Opportunity in Payments Can Drive 25% Upside

We expect COF to generate 2015 EPS of $7.70 (20 cents above consensus) as the payout ratio rises to ~80% corresponding to a 2015 buyback amount of $2.5 billion and reducing the average share count by 3-4%; even with this

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Barclays: 2016 ROE Target Achievable Given Competitive Strength of Investment Bank

Half of Barclay’s risk-weighted assets (RWA) are in businesses which do not meet the cost-of-equity (COE, estimated by management at 11.5%). We expect improving returns at the investment bank, together with a mix-shift in the portfolio so that RWA are

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Barclays: Swaps Compression/Central Clearing will reduce the Balance Sheet beyond Expectations

Derivatives compression (the restructuring of derivatives portfolios so that unwanted leverage exposure declines while target risk exposures remain within tolerance) will likely reduce industry notional amounts by over $60tn in 2013 (near 10% of the outstanding of ~$700tn – see

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Quick Thoughts – BAC: A Capital Tsunami

Since the Fed released guidelines for the 2014 CCAR process on November 1st, investors have expressed concern that the stress tests have been stiffened and that more capital than previously expected will be trapped in the banks in general and

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US Payments: Winners and Losers in Mobile

On Thursday, Google announced Android support for “host card emulation” which places payments credentials in the cloud and allows them to be securely accessed by mobile applications including digital wallets; in particular, NFC-enabled wallets no longer need to access the

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