Financial Biz Cheat Sheet: Citi and Wells Fargo Earnings, Spreads Rise
Citigroup Inc.’s (NYSE:C) third quarter earnings report included a net income of $3.8 billion ($1.23 earnings share), a 74 percent rise year over year and 13 percent above the previous quarter’s earnings. The company’s $20.8 billion revenue represented a slight increase from the prior year and the second quarter of 2011. In addition, Citigroup reported that it will move its retail partner cards and a majority of its assets from Citi Holdings into Citicorp. This will be completed by year’s end.
Capital One (NYSE:COF) reported a 3.65 percent rise in 30-day credit card delinquencies in September from August’s 3.43 percent. After seeing earlier improvements, it’s been two consecutive months of declining credit. On a positive note, the company saw a drop in charge-offs to 3.9 percent in September vs. August’s 4.1 percent.
Sun Life Financial (NYSE:SLF) faced a tough third quarter and reported a preliminary loss of $621 million (a $572 million loss on an operating basis). The losses stemmed from large declines in the equity markets and interest rate levels, affecting its individual life and variable annuity businesses.
Charles Schwab Corporation (NYSE:SCHW) saw a 77 percent rise in net income for the third quarter of $220 million as compared to $124 million from the previous year. However its third quarter revenue of $1.18 billion, a rise of 11 percent year over year and $0.18 earnings per share missed analysts’ forecasts by $10M and $0.01, respectively. The market responded by dumping the stock.
Investing Insights: Charles Schwab Earnings Cheat Sheet: Positive Earnings Streak.
After Citigroup’s (NYSE:C) and Wells Fargo’s (NYSE:WFC) reported their third quarter earnings, the market reacted with swelling bank CD spread prices. Goldman Sachs (NYSE:GS) saw a 22bps rise, Morgan Stanley’s (NYSE:MS) jumped 21bps, and Bank of America (NYSE:BAC) had an 18bps increase.
Deutsche Bank’s (NYSE:DB) foray into “casino banking” in Las Vegas is proving to expensive and not such a great idea. Its investment is now equal to its holdings in the Eurozone debt crisis. The bank’s Vegas holdings include the $3.9 billion, 3,000-room Cosmopolitan casino, a $1 billion balance from debt and a 25 percent equity holding in Station Casinos. On the other side of the pond, the investment parallel’s the bank’s $5.1 billion exposure in countries hard hit by the Eurozone debt crisis: Ireland, Italy, Greece, Portugal and Spain.