Saturday, April 20, 2013

Big Eight US Financial Corps 1Q 2013 Adjusted Earnings Up 5%

What many people consider to be the US Big 8 Financial Corps generated Total Adjusted Net Income to Common Shareholders of $24.0 bil in the 1Q 2013, which was an increase of 5% over the 1Q 2012.  However, this 5% total earnings growth was a substantial deceleration from the superlative total earnings growth experienced by these same companies in the 4Q 2012 over the 4Q 2011.

The main driver of this 5% total earnings growth in the 1Q 2013 was Wells Fargo, which experienced a 23% earnings growth.  However, on a Pretax/PreProvision For Loan Loss basis, Wells Fargo's 23% reported earnings growth drops dramatically to only 2%.

Bank of America's 1Q 2012 Adjusted Earnings below are before its large Debit Valuation Loss Adjustment on it Trading Liabilities, its large Fair Value Adjustment on its Structured Liabilities, and its large Gains on Debt and Trust-Preferred Repurchases.  I estimated the related Income Tax effect on these large items.

I have to wonder about the fairness of the recent US Government action which lets these Big Financial companies buy back so many of their common shares with no strings attached.  This is clearly an economic benefit for only the 1%, not for the entire country.  Haven't these Big Financial Corps already gotten enough largesse from the US Government, even though they first wrecked the US economy on a long-term basis and even while they continue to clever-by-half soak their customers, the 99%, in so many ways, and also do nothing to stimulate the US economy?

Below here are the 1Q 2013 and 1Q 2012 Adjusted Earnings for each of these US Big 8 Financial Corps:

    Adjusted Adjusted

1Q 1Q Net Net

2013 2012 Income Income

Adjusted Adjusted Increase Increase

Net Net (Decrease) (Decrease)

Income Income Amount %

mils of $s mils of $s mils of $s
US Big 8 Financial

JPMorgan Chase 6,117 6,402 (285) -4%
Wells Fargo 4,931 4,022 909 23%
Citigroup 4,073 3,428 645 19%
Bank of America 2,250 2,588 (338) -13%
Goldman Sachs 2,188 2,074 114 5%
General Electric Capital 1,927 1,772 155 9%
US Bancorp 1,358 1,285 73 6%
Morgan Stanley 1,177 1,343 (166) -12%

Total all 8 24,021 22,914 1,107 5%