Financial Biz Review: Vikram Pandit in Davos, Bank of America Pay Cuts
Zions Bancorp (NASDAQ:ZION) shares are lower after the bank holding company disappoints with its fourth quarter report. Lower net interest income and tepid loan volume were responsible for the upset. CEO Harris Simmons admits revenue growth was an obstacle but suggests improved results in 2012 due to stabilizing loan pricing and growth.
Citigroup’s (NYSE:C) Vikram Pandit is heading a delegation of bank executives at Davos, where a close comparison is being drawn between Citigroup and European Banks who have it worse, despite American firms retrenching. Observer, Mike Mayo is skeptical about Vikram Pandit’s opinion about the crisis in capitalism saying it is like “asking Alec Baldwin about airplane etiquette.”
Fitch is being added to a list of those to be investigated. In Italy there are allegations that it may have been involved in market manipulation by ratings agencies following their negative reports about the country. Also included in the upheaval are The McGraw-Hill Companies, Inc. (NYSE:MHP) and Moody’s Corporation (NYSE:MCO) and it was extended to Fitch after it warned of a two-notch downgrade for Italy.
Bank of America’s (NYSE:BAC) investors should be expecting a 25% cut in compensation, reports Bloomberg. Cutting its investment banker pay 20-30%, Morgan Stanley (NYSE:MS) follows suit, as well as Goldman Sachs Group Inc. (NYSE:GS) which has seen a cut in its compensation costs by 21% year-over-year.
Berkshire Hathaway (NYSE:BRKA) is down as it says it will float new corporate bonds in order to refinance some of the debt it took on to acquire Burlington Northern Sante Fe (BNI) for $26.5 billion. The purchase was made in 2010. The firm plans to issue five-year and 10-year notes up to a total of $1.7 billion, sources say.
TCF Financial (NYSE:TCB) is beaten down after missing analyst’s consensus view for the fourth quarter revenue and earnings. Credit quality remains a challenge for the regional bank as well.