ERICOPOLY Posted January 26, 2016 Share Posted January 26, 2016 Runoff. Sounds like a good time to change horses no? It doesn't look like runoff to me. Link to comment Share on other sites More sharing options...
wescobrk Posted January 27, 2016 Share Posted January 27, 2016 ROTCE: As we said we ran about 9%, it has just been travelling about 9.5% for the year and return to annual common equity. We believe we have a path to get that to 12. Rates get us part of it and hard work and expenses and core revenue growth has been driving to get this in LAS expense drop and we're chipping away that, if you look from '14 to '15 we made some substantial steps and we will continue to drive away. We haven’t put a specific timeframe on it. It’s just a goal to keep driving and we will drive beyond that. Thanks for posting but I read that as ROCE not ROTCE Link to comment Share on other sites More sharing options...
KCLarkin Posted January 27, 2016 Share Posted January 27, 2016 Wesco, I think the transcript is wrong. Link to comment Share on other sites More sharing options...
Rasputin Posted January 27, 2016 Share Posted January 27, 2016 Wesco, I think the transcript is wrong. yeah he was talking about ROTCE. That's the only negative I got from q4 2015 cc, during q1 2015 cc brian talked about achieving it by Q4 2016 From Q1 2015 transcript Mike Mayo (Analyst - CLSA): What are your financial targets for 2015 and 2016? Brian Moynihan (CEO): So, Mike, as we said, our goal is to continue to drive towards the 1% return on assets and depending on where we end up with capital between 7.5% and 8% tangible common equity ratio, that would translate into a 13 down to 12 return on tangible common equity. In this quarter we moved to up to where we have a return on tangible common equity is 8% and so -- and our return on assets was 64 basis points, so we are sort of two-thirds of the way to that goal. Mike Mayo (Analyst - CLSA): And what timeframe do you expect to get then? Brian Moynihan (CEO): I think if you adjust our earnings this quarter for a couple of things, the FAS 123, the FAS 91 and then continue to think of LAS normalizing, you see us get close to that goal and that should happen between now and the end of 2016 because we just keep chunking away at LAS as we have described. Link to comment Share on other sites More sharing options...
Rasputin Posted January 27, 2016 Share Posted January 27, 2016 hehe very nice fairy tale from thestreet.com Link to comment Share on other sites More sharing options...
wescobrk Posted January 27, 2016 Share Posted January 27, 2016 Wesco, I think the transcript is wrong. yeah he was talking about ROTCE. That's the only negative I got from q4 2015 cc, during q1 2015 cc brian talked about achieving it by Q4 2016 From Q1 2015 transcript Mike Mayo (Analyst - CLSA): What are your financial targets for 2015 and 2016? Brian Moynihan (CEO): So, Mike, as we said, our goal is to continue to drive towards the 1% return on assets and depending on where we end up with capital between 7.5% and 8% tangible common equity ratio, that would translate into a 13 down to 12 return on tangible common equity. In this quarter we moved to up to where we have a return on tangible common equity is 8% and so -- and our return on assets was 64 basis points, so we are sort of two-thirds of the way to that goal. Mike Mayo (Analyst - CLSA): And what timeframe do you expect to get then? Brian Moynihan (CEO): I think if you adjust our earnings this quarter for a couple of things, the FAS 123, the FAS 91 and then continue to think of LAS normalizing, you see us get close to that goal and that should happen between now and the end of 2016 because we just keep chunking away at LAS as we have described. Oh, thanks, that is very helpful. I only listened to it when I went to bed. I should have read the transcript. So, a 15% discount to TBV when it will be earning 12-13% within 11 months. It doesn't make sense. On the other hand, Moynihan has been wrong several times in the past (CCAR 2 or 3x, dilution to Buffett, etc). I would think he can get to 11% though. Link to comment Share on other sites More sharing options...
wescobrk Posted January 27, 2016 Share Posted January 27, 2016 if he gets to 13% and we can buy now at roughly 15%, one is earning roughly 15% whereas the 10 year is sub 2%. This is a 1300 basis point risk premium. Efficient Market? uhhh... Link to comment Share on other sites More sharing options...
benchmark Posted January 27, 2016 Share Posted January 27, 2016 Wesco, I think the transcript is wrong. yeah he was talking about ROTCE. That's the only negative I got from q4 2015 cc, during q1 2015 cc brian talked about achieving it by Q4 2016 From Q1 2015 transcript Mike Mayo (Analyst - CLSA): What are your financial targets for 2015 and 2016? Brian Moynihan (CEO): So, Mike, as we said, our goal is to continue to drive towards the 1% return on assets and depending on where we end up with capital between 7.5% and 8% tangible common equity ratio, that would translate into a 13 down to 12 return on tangible common equity. In this quarter we moved to up to where we have a return on tangible common equity is 8% and so -- and our return on assets was 64 basis points, so we are sort of two-thirds of the way to that goal. Mike Mayo (Analyst - CLSA): And what timeframe do you expect to get then? Brian Moynihan (CEO): I think if you adjust our earnings this quarter for a couple of things, the FAS 123, the FAS 91 and then continue to think of LAS normalizing, you see us get close to that goal and that should happen between now and the end of 2016 because we just keep chunking away at LAS as we have described. Oh, thanks, that is very helpful. I only listened to it when I went to bed. I should have read the transcript. So, a 15% discount to TBV when it will be earning 12-13% within 11 months. It doesn't make sense. On the other hand, Moynihan has been wrong several times in the past (CCAR 2 or 3x, dilution to Buffett, etc). I would think he can get to 11% though. Moynihan should be let go, now that law suits are over. Time to get a real banker. Link to comment Share on other sites More sharing options...
tylerdurden Posted January 27, 2016 Share Posted January 27, 2016 Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 27, 2016 Share Posted January 27, 2016 It's really weird that two days have passed and the stock isn't down another 5%. Link to comment Share on other sites More sharing options...
benchmark Posted January 27, 2016 Share Posted January 27, 2016 Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. Link to comment Share on other sites More sharing options...
tylerdurden Posted January 27, 2016 Share Posted January 27, 2016 Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. It is so hard to evaluate gigantic companies like these based on only personal experiences because obviously they have thousands of customers and any customer's experience could be different than others. "Cross Selling" is a buzz word I hear all the time and I have different type of accounts with many like BofA, Chase, Wells and Citi and some local banks. I cannot really tell you any one is doing better than the others in terms of "Cross selling" products except those never ending letters I receive in the mail from all of them. I actually like BofA's new long term relationship based rewards program in credit cards more than Chase/Citi's short term card customer acquisition strategy of giving one time huge bonus points since you can always be ditched after paying for the initial bonus points. Anyways, it is all based on personal experience again so it probably doesn't mean much. In terms of increasing efficiency, I'd recommend looking at the # of branches and employees since Moynihan became CEO. I'd think you'll find some efficiencies there. There can always be more things to do but writing off this guy vs others since he is a lawyer by education and perhaps can't talk as fancy as others does not make sense to me. It is a long journey with BofA but efficiency, overhead, LAS, Litigation costs etc. all going in the right direction so I have no issues with that... Link to comment Share on other sites More sharing options...
ourkid8 Posted January 27, 2016 Share Posted January 27, 2016 I always thought he would be a temp CEO while they had all the legal/legacy issues and once those have passed they would have brought in a true banker. Based on every metric, BAC is lagging it's peers which speaks to the quality of management in place. BAC needs to poach someone from WFC/USB/JPM to really drive the direction of this company. Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. It is so hard to evaluate gigantic companies like these based on only personal experiences because obviously they have thousands of customers and any customer's experience could be different than others. "Cross Selling" is a buzz word I hear all the time and I have different type of accounts with many like BofA, Chase, Wells and Citi and some local banks. I cannot really tell you any one is doing better than the others in terms of "Cross selling" products except those never ending letters I receive in the mail from all of them. I actually like BofA's new long term relationship based rewards program in credit cards more than Chase/Citi's short term card customer acquisition strategy of giving one time huge bonus points since you can always be ditched after paying for the initial bonus points. Anyways, it is all based on personal experience again so it probably doesn't mean much. In terms of increasing efficiency, I'd recommend looking at the # of branches and employees since Moynihan became CEO. I'd think you'll find some efficiencies there. There can always be more things to do but writing off this guy vs others since he is a lawyer by education and perhaps can't talk as fancy as others does not make sense to me. It is a long journey with BofA but efficiency, overhead, LAS, Litigation costs etc. all going in the right direction so I have no issues with that... Link to comment Share on other sites More sharing options...
tylerdurden Posted January 27, 2016 Share Posted January 27, 2016 Do you really believe that you can implant a CEO to this company and get significant change overnight? You have to look into how much legal costs each firm paid since crisis first and you'll see the difference in terms of where all these companies are coming from. If we had Jamie Dimon what could has he done differently? He wouldn't pay legal settlements? I think BAC paid something like $75-$80B in total and it is more than all other three majors (JPM/C/WFC) paid. This is going to have an impact on your every metric for a very very long time of course. Anyways I can continue but I never get any details from anyone who is suggesting Moynihan should be replaced in terms of what could be done differently other than those buzz words "cross selling", "True banker" etc. I am sure he can do lots of things better but in terms of criticism he gets, it is mostly rhetoric rather than material suggestions to me... I always thought he would be a temp CEO while they had all the legal/legacy issues and once those have passed they would have brought in a true banker. Based on every metric, BAC is lagging it's peers which speaks to the quality of management in place. BAC needs to poach someone from WFC/USB/JPM to really drive the direction of this company. Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. It is so hard to evaluate gigantic companies like these based on only personal experiences because obviously they have thousands of customers and any customer's experience could be different than others. "Cross Selling" is a buzz word I hear all the time and I have different type of accounts with many like BofA, Chase, Wells and Citi and some local banks. I cannot really tell you any one is doing better than the others in terms of "Cross selling" products except those never ending letters I receive in the mail from all of them. I actually like BofA's new long term relationship based rewards program in credit cards more than Chase/Citi's short term card customer acquisition strategy of giving one time huge bonus points since you can always be ditched after paying for the initial bonus points. Anyways, it is all based on personal experience again so it probably doesn't mean much. In terms of increasing efficiency, I'd recommend looking at the # of branches and employees since Moynihan became CEO. I'd think you'll find some efficiencies there. There can always be more things to do but writing off this guy vs others since he is a lawyer by education and perhaps can't talk as fancy as others does not make sense to me. It is a long journey with BofA but efficiency, overhead, LAS, Litigation costs etc. all going in the right direction so I have no issues with that... Link to comment Share on other sites More sharing options...
vinod1 Posted January 27, 2016 Share Posted January 27, 2016 Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. +1 One can get a pretty good idea by actually using the bank's interfaces by how much integration there is between different products. It gives a good read on the cross sell capability. You can do scuttlebutt with employees. You can try the products. I did both extensively as this has been my single largest investment ever at one time. I used BAC for mortgage even when they quoted me a higher price just because I wanted to know the process better. Believe me, I spent months working with their various teams and it is unbelievable how many different systems that can do the same thing when they process a loan. Moynihan is a great fit for the job in the last few years to take care of legal issues, but he is just not a banker. The difference is so damn obvious. Just read the annual letter. Vinod Link to comment Share on other sites More sharing options...
vinod1 Posted January 27, 2016 Share Posted January 27, 2016 Do you really believe that you can implant a CEO to this company and get significant change overnight? You have to look into how much legal costs each firm paid since crisis first and you'll see the difference in terms of where all these companies are coming from. If we had Jamie Dimon what could has he done differently? He wouldn't pay legal settlements? I think BAC paid something like $75-$80B in total and it is more than all other three majors (JPM/C/WFC) paid. This is going to have an impact on your every metric for a very very long time of course. Anyways I can continue but I never get any details from anyone who is suggesting Moynihan should be replaced in terms of what could be done differently other than those buzz words "cross selling", "True banker" etc. I am sure he can do lots of things better but in terms of criticism he gets, it is mostly rhetoric rather than material suggestions to me... I always thought he would be a temp CEO while they had all the legal/legacy issues and once those have passed they would have brought in a true banker. Based on every metric, BAC is lagging it's peers which speaks to the quality of management in place. BAC needs to poach someone from WFC/USB/JPM to really drive the direction of this company. Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. It is so hard to evaluate gigantic companies like these based on only personal experiences because obviously they have thousands of customers and any customer's experience could be different than others. "Cross Selling" is a buzz word I hear all the time and I have different type of accounts with many like BofA, Chase, Wells and Citi and some local banks. I cannot really tell you any one is doing better than the others in terms of "Cross selling" products except those never ending letters I receive in the mail from all of them. I actually like BofA's new long term relationship based rewards program in credit cards more than Chase/Citi's short term card customer acquisition strategy of giving one time huge bonus points since you can always be ditched after paying for the initial bonus points. Anyways, it is all based on personal experience again so it probably doesn't mean much. In terms of increasing efficiency, I'd recommend looking at the # of branches and employees since Moynihan became CEO. I'd think you'll find some efficiencies there. There can always be more things to do but writing off this guy vs others since he is a lawyer by education and perhaps can't talk as fancy as others does not make sense to me. It is a long journey with BofA but efficiency, overhead, LAS, Litigation costs etc. all going in the right direction so I have no issues with that... It paid like $1.2 billion in legal (from memory so just be gentle) 2015. So how is it impacting the metrics for 2015? Moynihan did a great job, but if you read WFC or JPM annual letter or their other presentation or look at any metrics, one comes up with different picture of what is needed going forward. Vinod Link to comment Share on other sites More sharing options...
tylerdurden Posted January 27, 2016 Share Posted January 27, 2016 Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. +1 One can get a pretty good idea by actually using the bank's interfaces by how much integration there is between different products. It gives a good read on the cross sell capability. You can do scuttlebutt with employees. You can try the products. I did both extensively as this has been my single largest investment ever at one time. I used BAC for mortgage even when they quoted me a higher price just because I wanted to know the process better. Believe me, I spent months working with their various teams and it is unbelievable how many different systems that can do the same thing when they process a loan. Moynihan is a great fit for the job in the last few years to take care of legal issues, but he is just not a banker. The difference is so damn obvious. Just read the annual letter. Vinod It comes down to everyone's own experience again. I like the integration they created between BofA and the ML brokerage accounts for example. I don't know about their mortgages but I have a terrible experience with WFC mortgage business on the other hand. Anyways, we can continue but everyone would have their own views at the end. Also I don't get why your formal education is this important? We see all sorts of people doing many different things successfully outside of their formal educations. I am sure he knows how banking, cross selling works etc. after spending all these years in the industry. Could he be a more effective leader? I have no clue. Perhaps but in terms of this "true banker" argument, I don't still get that... Link to comment Share on other sites More sharing options...
vinod1 Posted January 27, 2016 Share Posted January 27, 2016 Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. +1 One can get a pretty good idea by actually using the bank's interfaces by how much integration there is between different products. It gives a good read on the cross sell capability. You can do scuttlebutt with employees. You can try the products. I did both extensively as this has been my single largest investment ever at one time. I used BAC for mortgage even when they quoted me a higher price just because I wanted to know the process better. Believe me, I spent months working with their various teams and it is unbelievable how many different systems that can do the same thing when they process a loan. Moynihan is a great fit for the job in the last few years to take care of legal issues, but he is just not a banker. The difference is so damn obvious. Just read the annual letter. Vinod It comes down to everyone's own experience again. I like the integration they created between BofA and the ML brokerage accounts for example. I don't know about their mortgages but I have a terrible experience with WFC mortgage business on the other hand. Anyways, we can continue but everyone would have their own views at the end. Also I don't get why your formal education is this important? We see all sorts of people doing many different things successfully outside of their formal educations. I am sure he knows how banking, cross selling works etc. after spending all these years in the industry. Could he be a more effective leader? I have no clue. Perhaps but in terms of this "true banker" argument, I don't still get that... A true banker would not be depending on rate increases to get to 1% ROA or higher ROTCE or a better efficiency ratio :) If you want to understand "true banker" reading up on WFC, USB, MTB and JPM annual reports for the last 10 years would be a good start. If you did already but do not see any difference with BAC management, I cannot really help. Not much to add, we would just agree to disagree. Vinod Link to comment Share on other sites More sharing options...
tylerdurden Posted January 27, 2016 Share Posted January 27, 2016 Do you really believe that you can implant a CEO to this company and get significant change overnight? You have to look into how much legal costs each firm paid since crisis first and you'll see the difference in terms of where all these companies are coming from. If we had Jamie Dimon what could has he done differently? He wouldn't pay legal settlements? I think BAC paid something like $75-$80B in total and it is more than all other three majors (JPM/C/WFC) paid. This is going to have an impact on your every metric for a very very long time of course. Anyways I can continue but I never get any details from anyone who is suggesting Moynihan should be replaced in terms of what could be done differently other than those buzz words "cross selling", "True banker" etc. I am sure he can do lots of things better but in terms of criticism he gets, it is mostly rhetoric rather than material suggestions to me... I always thought he would be a temp CEO while they had all the legal/legacy issues and once those have passed they would have brought in a true banker. Based on every metric, BAC is lagging it's peers which speaks to the quality of management in place. BAC needs to poach someone from WFC/USB/JPM to really drive the direction of this company. Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. It is so hard to evaluate gigantic companies like these based on only personal experiences because obviously they have thousands of customers and any customer's experience could be different than others. "Cross Selling" is a buzz word I hear all the time and I have different type of accounts with many like BofA, Chase, Wells and Citi and some local banks. I cannot really tell you any one is doing better than the others in terms of "Cross selling" products except those never ending letters I receive in the mail from all of them. I actually like BofA's new long term relationship based rewards program in credit cards more than Chase/Citi's short term card customer acquisition strategy of giving one time huge bonus points since you can always be ditched after paying for the initial bonus points. Anyways, it is all based on personal experience again so it probably doesn't mean much. In terms of increasing efficiency, I'd recommend looking at the # of branches and employees since Moynihan became CEO. I'd think you'll find some efficiencies there. There can always be more things to do but writing off this guy vs others since he is a lawyer by education and perhaps can't talk as fancy as others does not make sense to me. It is a long journey with BofA but efficiency, overhead, LAS, Litigation costs etc. all going in the right direction so I have no issues with that... It paid like $1.2 billion in legal (from memory so just be gentle) 2015. So how is it impacting the metrics for 2015? Moynihan did a great job, but if you read WFC or JPM annual letter or their other presentation or look at any metrics, one comes up with different picture of what is needed going forward. Vinod I am not only talking about 2015. If you paid $80B legal expenses wouldn't that have a huge impact on your capital metrics for a long time? You have to come up with that lost capital. It is lost money that could have been used anywhere actually including investments, hiring better talent etc. and I don't think any of these banks can be managed in 1 year increments only. Any major development that happened in several years ago would still have an impact on all of your organization. The distraction all these settlements create for the whole organization is also a bonus. Anyways I guess no one is arguing BofA is the leading major bank at this point but before criticizing the CEO I'd also look into what he was inherited and the impact he creates. Link to comment Share on other sites More sharing options...
ourkid8 Posted January 27, 2016 Share Posted January 27, 2016 Yes, I truly do and saying overnight is facetious. If Jamie/John Stumph etc. caliber CEO was named to the post, they will come in with a 90 day plan to change the direction/culture of this organization. BAC is similar to AIG and that's why Carl Icahn is hammering away at the fact management has no credibility and has zero sense of urgency. What is BAC's time frame to hit INDUSTRY metrics on a ROE/ROA/efficiency etc? BM still has not been able to share that information, it's asinine how someone can support him and say he is doing a great job! These guys are highly paid and must be held to account yet people accept mediocrity. I really hope Carl Icahn can take a stake in BAC/C and force change... Do you really believe that you can implant a CEO to this company and get significant change overnight? You have to look into how much legal costs each firm paid since crisis first and you'll see the difference in terms of where all these companies are coming from. If we had Jamie Dimon what could has he done differently? He wouldn't pay legal settlements? I think BAC paid something like $75-$80B in total and it is more than all other three majors (JPM/C/WFC) paid. This is going to have an impact on your every metric for a very very long time of course. Anyways I can continue but I never get any details from anyone who is suggesting Moynihan should be replaced in terms of what could be done differently other than those buzz words "cross selling", "True banker" etc. I am sure he can do lots of things better but in terms of criticism he gets, it is mostly rhetoric rather than material suggestions to me... I always thought he would be a temp CEO while they had all the legal/legacy issues and once those have passed they would have brought in a true banker. Based on every metric, BAC is lagging it's peers which speaks to the quality of management in place. BAC needs to poach someone from WFC/USB/JPM to really drive the direction of this company. Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. It is so hard to evaluate gigantic companies like these based on only personal experiences because obviously they have thousands of customers and any customer's experience could be different than others. "Cross Selling" is a buzz word I hear all the time and I have different type of accounts with many like BofA, Chase, Wells and Citi and some local banks. I cannot really tell you any one is doing better than the others in terms of "Cross selling" products except those never ending letters I receive in the mail from all of them. I actually like BofA's new long term relationship based rewards program in credit cards more than Chase/Citi's short term card customer acquisition strategy of giving one time huge bonus points since you can always be ditched after paying for the initial bonus points. Anyways, it is all based on personal experience again so it probably doesn't mean much. In terms of increasing efficiency, I'd recommend looking at the # of branches and employees since Moynihan became CEO. I'd think you'll find some efficiencies there. There can always be more things to do but writing off this guy vs others since he is a lawyer by education and perhaps can't talk as fancy as others does not make sense to me. It is a long journey with BofA but efficiency, overhead, LAS, Litigation costs etc. all going in the right direction so I have no issues with that... Link to comment Share on other sites More sharing options...
tylerdurden Posted January 27, 2016 Share Posted January 27, 2016 Moynihan should be let go, now that law suits are over. Time to get a real banker. What would a "real banker" do differently vs Moynihan's record? I think there is some tendency to overemphasize one person's impact on a giant institution such as BofA. Should they be more aggressive buying growth, customers etc.? I just want them to be conservative bankers, that's all they need in the long run... A real banker would drive hard at integrating/modernizing their internal system to improve efficiency, and try cross selling harder. I have a mortgage and a bank account with them. Besides getting occasional letters on home equity lines, I don't get any promotional offers to try to convince me to use them more often. In contrast, Chase tries to sell me every time that I use them. In fact, when I finally decided that I should close the bank account, their rep didn't know that I have a mortgage with them. +1 One can get a pretty good idea by actually using the bank's interfaces by how much integration there is between different products. It gives a good read on the cross sell capability. You can do scuttlebutt with employees. You can try the products. I did both extensively as this has been my single largest investment ever at one time. I used BAC for mortgage even when they quoted me a higher price just because I wanted to know the process better. Believe me, I spent months working with their various teams and it is unbelievable how many different systems that can do the same thing when they process a loan. Moynihan is a great fit for the job in the last few years to take care of legal issues, but he is just not a banker. The difference is so damn obvious. Just read the annual letter. Vinod It comes down to everyone's own experience again. I like the integration they created between BofA and the ML brokerage accounts for example. I don't know about their mortgages but I have a terrible experience with WFC mortgage business on the other hand. Anyways, we can continue but everyone would have their own views at the end. Also I don't get why your formal education is this important? We see all sorts of people doing many different things successfully outside of their formal educations. I am sure he knows how banking, cross selling works etc. after spending all these years in the industry. Could he be a more effective leader? I have no clue. Perhaps but in terms of this "true banker" argument, I don't still get that... A true banker would not be depending on rate increases to get to 1% ROA or higher ROTCE or a better efficiency ratio :) If you want to understand "true banker" reading up on WFC, USB, MTB and JPM annual reports for the last 10 years would be a good start. If you did already but do not see any difference with BAC management, I cannot really help. Not much to add, we would just agree to disagree. Vinod I don't think I need your help my friend at all and I agree this conversation is probably waste of time for both of us so agree to disagree... Link to comment Share on other sites More sharing options...
Rasputin Posted January 27, 2016 Share Posted January 27, 2016 Since I'd love for BAC stock to keep coming down I'll chant with you guys: BAC is crap! WFC, JPM are gems! Moynihan sucks! Stumpf and Diamon are true bankers! Link to comment Share on other sites More sharing options...
jay21 Posted January 27, 2016 Share Posted January 27, 2016 vinod - how much of BofAs underperformance is due to holding on to too much capital and poor asset mix because of litigation and non-core? I don't think Citi is meaningfully outperforming BofA and they are probably the only true comparable in terms of legacy issues. Link to comment Share on other sites More sharing options...
vinod1 Posted January 27, 2016 Share Posted January 27, 2016 vinod - how much of BofAs underperformance is due to holding on to too much capital and poor asset mix because of litigation and non-core? I don't think Citi is meaningfully outperforming BofA and they are probably the only true comparable in terms of legacy issues. Jay, What I am saying is that after adjusting for all that, if you look at the operational performance there is a gap with peers. I do not know why, and speculated earlier in the thread as to some reasons. I recently made it a large position, so if I am sounding negative, it is because I prefer to be the one arguing the bear side on my long positions. I personally find confirmation bias to be perhaps the greatest source of errors and most the most difficult to eliminate, however hard I try. So to keep myself honest, I try to find a few negatives on my longs. If you look at some of the threads, you would see how even negative information would be seen in a positive light - by some very very good investors. It is easy to see in others, not so much in one's own. Vinod Link to comment Share on other sites More sharing options...
Peregrine Posted January 27, 2016 Share Posted January 27, 2016 Yes, I truly do and saying overnight is facetious. If Jamie/John Stumph etc. caliber CEO was named to the post, they will come in with a 90 day plan to change the direction/culture of this organization. BAC is similar to AIG and that's why Carl Icahn is hammering away at the fact management has no credibility and has zero sense of urgency. What is BAC's time frame to hit INDUSTRY metrics on a ROE/ROA/efficiency etc? BM still has not been able to share that information, it's asinine how someone can support him and say he is doing a great job! These guys are highly paid and must be held to account yet people accept mediocrity. I really hope Carl Icahn can take a stake in BAC/C and force change... You don't sound very experienced in how a very large institution, much less a very large financial institution, works. Like all big banks, B of A's consumer banking segment is by far its most profitable - generating ROTCE of 25%, in line with the best of its peers such as Wells. Their least profitable, and incidentally highly capital draining business, is their global markets business. You think you can completely dismantle a bank's entire trading operation within the scope of a year, much less even be able to do that since you're such an integral market maker? There is no chance of that happening. So taken as a whole, B of A will be a less profitable business (especially if regulation on FICC trading remains or becomes even more difficult) than a bank like Wells. Also, their legacy assets from Countrywide and the mess they got themselves into during the housing bubble is still in continual run-off and still looms large on their balance sheet. Considering all this, the fact that B of A has managed to turn in a ROTCE of 10% (excl. litigation costs) in 2015 is impressive. Given the hand that he was dealt, Moynihan has done a terrific job. Link to comment Share on other sites More sharing options...
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