Improved Loan Growth Drives Wells Fargo -- Citigroup Dragged Down by Investment Banking
January 19, 2012 08:20 ET
Improved Loan Growth Drives Wells Fargo -- Citigroup Dragged Down by Investment Banking
Five Star Equities Provides Stock Research on Citigroup & Wells Fargo
NEW YORK, NY--(Marketwire - Jan 19, 2012) - Major Banks have reported a mixed bag of results this earnings season. While loan growth is on the upswing, banks with a heavy focus on trading struggled in the fourth quarter. As reported in Bloomberg, concerns that the European debt crisis would lead to a global economic slowdown curbed trading volume and investment-banking deals in the year's second half. Five Star Equities examines investing opportunities in the Money Center Banking Industry and provides equity research on Citigroup, Inc. (
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Mike Mayo, an analyst at CLSA Ltd., told Bloomberg News that U.S. banks' revenue growth in 2011 was probably the slowest since the Great Depression and is unlikely to improve this year. Acting Comptroller of the Currency John Walsh recently warned that the Volcker rule's restrictions on proprietary trading and hedge fund investments could put U.S. banks at a competitive disadvantage to their foreign counterparts.
The Volcker rule would curb banks' trading with their own funds and would limit their investments in hedge funds -- restrictions that would reduce their profitability.
Five Star Equities releases regular market updates on the Money Center Banking industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at [ www.fivestarequities.com ] and get exclusive access to our numerous stock reports and industry newsletters.
Shares of Citigroup took a sizeable hit earlier this week after the Major Bank said fourth-quarter revenue fell 7 percent from a year earlier to $17.2 billion. Net income declined 11 percent to $1.17 billion as trading revenue dropped 37 percent, excluding accounting adjustments, and investment banking revenue collapsed 45 percent.
One of the lone bright spots among the major banks last quarter was Wells Fargo, which relies least on trading among the six biggest U.S. banks. Wells Fargo said a focus on loans helped soften the blow of Europe's debt crisis, with revenue down 4 percent to $20.6 billion.
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