Two big pieces of news broke today that are likely to be hammering shares of the nation's biggest banks and roiling the market. The Dow
1. Bank earnings season begins
Today officially kicks off the earnings season for banks, with JPMorgan
The year-over-year declines came disproportionately from the investment banking side of the operation -- which includes revenue from trading, mergers, and stock offerings. This division saw business fall off in the quarter due to uncertainty surrounding the events in Europe. Its fourth-quarter net revenue was off by 30%, from $6.2 billion a year ago to $4.4 billion this year.
On the plus side, loan growth and loan quality figures were favorable.
Next up for bank earnings are Wells Fargo
2. More trouble for B of A?
It was also disclosed in The Wall Street Journal that Bank of America has informed banking regulators that it's willing to retreat from some parts of the country if its financial problems persist. According to the report, the most likely targets for cutbacks are branches in areas with a population of less than 500,000, where about $60 billion of the bank's roughly $1 trillion in deposits are held.
If this comes to fruition, it will mark a continuation of the bank's departure from its years of reckless growth under Ken Lewis, B of A's now-disgraced former CEO. Since taking over in 2010, current CEO Brian Moynihan has sold off billions of dollars of non-core assets and aggressively scaled back the company's work force in an effort to bring the bank into compliance with a new regime of heightened banking regulations.
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