Wednesday, January 23, 2008

Every Major U.S. Bank Was Profitable Last Year

Jan. 22 (Bloomberg) -- With all the large writedowns and losses announced for the fourth quarter, hardly any attention is being paid to just how profitable U.S. banks really are.

That inattention has raised unnecessary concerns that the banks may be so crippled by losses that they will cut lending to the point it might undermine the U.S. economy.

Some commentators have said the banks are in the worst shape since the Great Depression. That isn't close to being correct. Every major U.S. bank was profitable in 2007 (see chart above, click to enlarge).

For example:

Citigroup: For the full year 2007, net income was $3.62 billion.

JP Morgan: For the full-year 2007, net income was a record $15.4 billion on record revenue of $71.4 billion.

Bank of America: For the full year, Bank of America reported earnings of $14.98 billion.

Wachovia: For the full year, Wachovia earned $6.31 billion.

Wells Fargo: For all of 2007, Wells Fargo earned $8.06 billion.

Sun Trust: The company had net income of $1.6 billion in 2007.

Regions Bank: For 2007, Regions earned $1.3 billion.

National City: The company reported full-year earnings of $314 million in 2007.


At 1/24/2008 7:47 AM, Anonymous Anonymous said...

Guess their stocks been cut in half because the expectation is they aren't going to be making a dime this year. After this dead cat bounce I'll go back to shorting them, this downturn is far from over and some of these banks are basically insolvent.

At 1/24/2008 9:57 AM, Anonymous Anonymous said...

Anon -

You don't have the faintest clue what you are talking about.

Expectations for this year (2008)-

JP Morgan - $4.14 a share
Bank of America - $4.23 a share
Wachovia - $4.12 a share
Citigroup - $3.04 a share
Suntrust - $5.42 a share
Wells Fargo - $2.60 a share
Regions - $2.21 a share
National City - $1.59 a share

All have the "expectation" of being profitable this year. They are at historic low valuations, have high yields, and are not remotely insolvent. Go ahead and short them fool.

At 1/24/2008 3:15 PM, Anonymous Anonymous said...

Thanks, Anon. 9:57,

This post & your comments are most useful for an investor like me.

Note: I am not Anon. 7:47


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