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Signature Bank ups provision by 33%; BB&T records penny hit to EPS from M&A


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Signature Bank ups provision by 33%; BB&T records penny hit to EPS from M&A

For the fourth quarter of 2016, Signature Bank reported EPS of $2.11, up from the year-ago period's $2.01. The New York-based bank also increased provision for loan losses by 33% from a year ago, largely due to additional reserves for its taxi medallion loans.

BB&T Corp. reported EPS of 72 cents for the quarter, calculating it to actually be 73 cents per share if merger-related and restructuring charges are excluded. The S&P Capital IQ consensus normalized EPS estimate was 74 cents for the period.

Bank of New York Mellon Corp. reported fourth-quarter 2016 net income applicable to common shareholders of $822 million, or 77 cents per share. In comparison, it was $637 million, or 57 cents per share, a year ago.

The U.K. Prime Minister will be with Wall Street's leaders in Davos today, notes Bloomberg News, following Theresa May's Jan. 17 press conference on her Brexit plans.

Brexit-related talk, meanwhile, includes a Handelsblatt report that Goldman Sachs Group Inc. may halve its London staff and move 1,000 of its personnel to a new subsidiary in Frankfurt. Back-office employees will reportedly be transferred to Warsaw; investment bankers to France and Spain; and trading personnel who don't advise customers may end up in New York. Goldman itself, however, told Bloomberg "no decision has been taken and the numbers mentioned are none [the bank] would recognize."

A Bloomberg interview with JPMorgan Chase & Co.'s Jamie Dimon also touched on possible relocations. The bank had earlier calculated that it would have to move 4,000 of its London-based employees. Dimon yesterday emphasized it had only been an estimate, but added "it looks like there will be more job movement than we hoped for."

Asked about political developments on his side of the Atlantic, the CEO said people may be overworrying Donald Trump's "tweets and one-liners." After all, "the president-elect has said 'I negotiate that way,'" and at the same time nominated "very serious people" to create his administration's actual policies. Dimon added, "I know Steven Mnuchin; I know Wilbur Ross, Rex Tillerson, Gary Cohn … I think the real policy will be kind of rational and thoughtful."

In more banking news, Bank of N.T. Butterfield & Son Ltd. of Bermuda has wound down its London-based private banking business and is no longer offering deposit-taking and investment management services in the U.K.

And a U.S. appeals court yesterday overturned the dismissal of the FDIC's 2012 lawsuit against Credit Suisse First Boston Mortgage Securities Corp. and subsidiaries of HSBC, Royal Bank of Scotland, UBS and Deutsche Bank, Reuters reports. Their sales of MBS to Illinois banks Citizens National Bank and Strategic Capital Bank allegedly caused those banks to fail.

Another courtroom development, this time in the specialty lending scene, is the Supreme Court's overturning of a ruling that Fannie Mae's charter allowed it to transfer lawsuits to federal courts from state — as did a similar one in Freddie Mac's. But Justice Sonia Sotomayor said the two entities' "sue-and-be-sued" provisions were differently worded, and that when Fannie Mae "points to its sibling rival [Freddie Mac, and] argues there is no good reason to think that Congress gave Freddie Mac fuller access to the federal courts," there are actually "clear textual indications suggesting Congress did just that." In addition, "when Freddie Mac's sue-and-be-sued clause and related jurisdictional provisions were enacted, Freddie Mac was a Government-owned corporation. ... Fannie Mae, on the other hand, had already transitioned into a privately owned corporation."

And SoFi is expanding into Australia to offer mortgages, according to the Australian Financial Review. It will be the online lender's first office outside the U.S.

Lastly, the OCC's plan to give fintech firms a national charter is getting pushback from New York's Department of Financial Services. Superintendent Maria Vullo said she was throwing down the gauntlet against "the imposition of an entirely new regulatory scheme on an already fully functional and deeply rooted state regulatory landscape." In an earlier letter to Comptroller of the Currency Thomas Curry, Vullo had also said: "The states know best the needs of consumers who live and work within a state's borders ... We must protect the tried-and-true financial services business models that grew with the history of their communities."

In other parts of the world

Asia-Pacific: Singapore convicts former traders; South Korea eyes currency swap extension

Europe: Credit Suisse settles with US, warns on Q4'16; London set for financial exodus

Middle East & Africa: National Commercial Bank posts Q4'16 results; Mozambique downgraded

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng fell 0.21% to 23,049.96, and the Nikkei 225 was up 0.94% to 19,072.25.

In Europe, as of midday, the FTSE 100 was down 0.48% to 7,212.65, and the Euronext 100 was up 0.02% to 933.71.

On the macro front

The housing starts report, the jobless claims report, the EIA natural gas report, the EIA petroleum status report, the Fed balance sheet and the money supply report are due out today.

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