Well-known banking analyst Dick Bove of Rochdale Securities was on Bloomberg to discuss his views on just-announced job cuts by Bank of America (BAC, Financial), and even if it is making money by its cost cutting efforts at this point it has a great set of factors in its favor for great earnings going forward.
-- Have over $1 trillion in deposits and $900 billion in loan outstanding. Merrill Lynch is much better than they expected. Their fee-based businesses are starting to improve.
-- They hired 50,000 people to take care of foreclosure houses. Now that the housing is improving they don't need that many people.
-- The Fed's continuous easing is creating a financial repression and yield curve is not out their for sustainable profits, but the fact is the economy has not gone into recession — it is still expanding and so are commercial loans. Mortgage loans have gone up as well. The banking industry made most money in 2nd quarter of 2012
-- Banks' return on equity is not more than 12% to 13%, which means they are earning their cost of capital.
Source and Credit: www.bloomberg.com, Bloomberg
Here is the video:
http://bloom.bg/PD2XAD
-- Have over $1 trillion in deposits and $900 billion in loan outstanding. Merrill Lynch is much better than they expected. Their fee-based businesses are starting to improve.
-- They hired 50,000 people to take care of foreclosure houses. Now that the housing is improving they don't need that many people.
-- The Fed's continuous easing is creating a financial repression and yield curve is not out their for sustainable profits, but the fact is the economy has not gone into recession — it is still expanding and so are commercial loans. Mortgage loans have gone up as well. The banking industry made most money in 2nd quarter of 2012
-- Banks' return on equity is not more than 12% to 13%, which means they are earning their cost of capital.
Source and Credit: www.bloomberg.com, Bloomberg
Here is the video:
http://bloom.bg/PD2XAD
