Financial Biz Cheat Sheet: Morgan Stanley and Citigroup in the Spotlight
Morgan Stanley’s (NYSE:MS) strong third quarter earnings of $1.14 included a $1.12 debt valuation adjustment — DVA. This accounting gain comes from a bank’s widening credit spread. This inverse relationship is tough to come by: the worse the environment, the larger the gain.
Visa’s (NYSE:V) board of directors declared a 47 percent rise in its quarterly dividend from $0.15 per share to $0.22 per share . It’s payable on December 6, 2011 to all holders of record. With this quarterly rise, the company’s annual dividend rate jumps to $0.88 per share from $0.60 per share.
Investing Insights: Will Weak Bank Earnings Force Investors into Gold?
Citigroup Inc. (NYSE:C) will pay a $285 million settlement fine for charges brought against them by the Securities and Exchange Commission. The regulatory agency alleged that the firm’s Citigroup Global Markets group misled investors from a structured and marketed $500 million collateralized-debt obligation that was backed by subprime loans. Citigroup then bet against these products but failed to inform investors.
While signals from the European Commission suggest that a debt crisis solution is moving forward with possible bank recapitalizations, European and UK banks aren’t so confident. Barclays (NYSE:BCS), Bank of Ireland (NYSE:IRE) and Santander (NYSE:STD) all saw their stocks dip lower on continuous worries from their minor exposure to the euro-zone debt.
Don’t Miss: 4 Bank Stocks Bucking the Downward Trend.