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Showing posts with label Confessional. Show all posts
Showing posts with label Confessional. Show all posts

Friday, February 26, 2010

Fannie Mae Reports $15.2 Billion Loss

by Calculated Risk on 2/26/2010 07:36:00 PM

Press Release: Fannie Mae Reports Fourth-Quarter and Full-Year 2009 Results

Fannie Mae reported a net loss of $15.2 billion in the fourth quarter of 2009 ... For the full year of 2009, Fannie Mae reported a net loss of $72.0 billion...

The fourth-quarter loss resulted in a net worth deficit of $15.3 billion as of December 31, 2009, taking into account unrealized gains on available-for-sale securities during the fourth quarter. As a result, on February 25, 2010, the Acting Director of the Federal Housing Finance Agency submitted a request for $15.3 billion from Treasury on the company’s behalf. FHFA has requested that Treasury provide the funds on or prior to March 31, 2010.
...
Although there have been signs of stabilization in the housing market and economy, we expect that our credit-related expenses will remain high in the near term due in large part to the stress of high unemployment and underemployment on borrowers and the fact that many borrowers who owe more on their mortgagees than their houses are worth are defaulting.
...
We expect to have a net worth deficit in future periods, and therefore will be required to obtain additional funding from Treasury ...
I'm old enough to remember when $15 billion was a large number.

Wednesday, February 24, 2010

Freddie Mac: "Potential Large Wave of Foreclosures"

by Calculated Risk on 2/24/2010 11:55:00 AM

"We start 2010 with some early signs of stabilization in the housing market, with house prices and home sales likely nearing the bottom sometime in 2010. We expect that low mortgage rates, relatively high affordability and the homebuyer tax credit will help continue to fuel the recovery. Still, the housing recovery remains fragile, with significant downside risk posed by high unemployment and a potential large wave of foreclosures."
Freddie Mac Chief Executive Officer Charles E. Haldeman, Jr.
The quote is from the Freddie Mac Q4 earnings release:
Freddie Mac Releases Fourth Quarter and Full-Year 2009 Financial Results Fourth quarter 2009 net loss was $6.5 billion. After the dividend payment of $1.3 billion to the U.S. Department of the Treasury (Treasury) on the senior preferred stock, net loss attributable to common stockholders was $7.8 billion ... for the fourth quarter of 2009.
...
Full-year 2009 net loss was $21.6 billion. After dividend payments of $4.1 billion during the year to Treasury on the senior preferred stock, net loss attributable to common stockholders was $25.7 billion ... for the full-year 2009.
Another $7.8 billion in losses ...

Tuesday, January 19, 2010

Citigroup: Fourth Quarter Net Loss of $7.6 Billion

by Calculated Risk on 1/19/2010 08:10:00 AM

Press Release: Fourth Quarter Net Loss of $7.6 Billion

Citigroup today reported a full year 2009 net loss of $1.6 billion ... Managed revenues were $91.1 billion for the year. The fourth quarter 2009 net loss was $7.6 billion ...

"We ... cut costs by over $13 billion annually, reduced headcount by 100,000, and reduced assets by $500 billion from peak levels." [said Vikram Pandit, Chief Executive Officer of Citigroup]
More from Eric Dash at the NY Times: Citigroup Reports a $1.6 Billion Loss for Year
[L]osses in Citigroup’s domestic mortgages and credit units overwhelmed gains from investment banking, a trend that is likely to continue. Bank executives set aside another $700 million to cover consumer losses in the fourth quarter, bringing the total amount of reserves to about $36 billion at year’s end.
The confessional is still open.

Thursday, November 05, 2009

Fannie Mae: $18.9 Billion Loss, Requests Another $15 Billion

by Calculated Risk on 11/05/2009 05:20:00 PM

Press Release: Fannie Mae Reports Third-Quarter 2009 Results

Fannie Mae (FNM/NYSE) reported a net loss of $18.9 billion in the third quarter of 2009, compared with a loss of $14.8 billion in the second quarter of 2009. ... Third-quarter results were largely due to $22.0 billion of credit related expenses, reflecting the continued build of the company’s combined loss reserves and fair value losses associated with the increasing number of loans that were acquired from mortgage backed securities trusts in order to pursue loan modifications.
...
As a result, on November 4, 2009, the Acting Director of the Federal Housing Finance Agency (FHFA) submitted a request for $15.0 billion from Treasury on the company’s behalf.
...
The seriously delinquent loans in our single-family book of business, which we define as those loans 90 or more days delinquent or in the process of foreclosure, increased and aged during the third quarter. This was caused by a greater number of loans that transitioned to seriously delinquent status, while the proportion of already seriously delinquent loans that cured or transitioned to completed foreclosures declined. Factors contributing to the increase in serious delinquencies included: high unemployment that hampered the ability of many delinquent borrowers to cure their delinquencies; Home Affordable Modifications in trial periods, which remain classified as delinquent; our directive that servicers delay foreclosure sales until other alternatives, including Home Affordable Modification, have been exhausted; and, the slowdown in the legal process for foreclosures in a number of states.
...
Total nonperforming loans in our guaranty book of business were $198.3 billion, compared with $171.0 billion on June 30, 2009, and $119.2 billion on December 31, 2008. The carrying value of our foreclosed properties was $7.3 billion, compared with $6.2 billion on June 30, 2009, and $6.6 billion on December 31, 2008.
emphasis added

Friday, October 16, 2009

Bank of America Still Struggling

by Calculated Risk on 10/16/2009 08:42:00 AM

From Reuters: BofA Posts Loss Amid Consumer Credit Woes

The nation's largest bank reported a net loss of $1 billion... The bank set aside $11.7 billion during the quarter for credit losses, $1.7 billion less than in the second quarter but $5.3 billion more than in the 2008 third quarter.
And from the WSJ:
Credit-loss provisions swelled 81%, while the net charge-off rate was up at 4.13% from 1.84% a year earlier and 3.64% in the second quarter. Total nonperforming assets rose to 3.72% from 1.45% in the prior year and 3.31% last quarter.
The confessional is still open.

Sunday, July 12, 2009

Report: Lloyds to writeoff up to £13bn

by Calculated Risk on 7/12/2009 09:42:00 AM

The confessional is still open ...

From The Times: Lloyds braced for £13bn writeoff (about $21 billon)

LLOYDS BANKING GROUP is poised to write off as much as £13 billion on its loans to commercial property, businesses and mortgage holders ...

First-half results due to be posted in three weeks will show that its losses are accelerating ...

UBS analysts expect Lloyds to announce a bottom line half-year loss of £6.3 billion as a result of the soaring provisions.
Remember when a multi-billion dollar writeoff was shocking?

Saturday, May 16, 2009

Sovereign Bancorp Losses

by Calculated Risk on 5/16/2009 02:14:00 PM

From the Boston Globe: Sovereign Bancorp reports $817.3m loss

Sovereign Bancorp ... lost $817.3 million in the quarter, compared with a net income of $100.1 million in the same period a year ago. It also reported that it set aside $505 million for bad loans, up from $135 million a year ago. The Philadelphia-based holding company owns Sovereign Bank and was acquired in January by Spain's Banco Santander.

The bank's total allowance for loan losses was $1.3 billion at the end of the quarter. Sovereign also has a large exposure to soured investments: nearly $1 billion in unrealized losses on investment securities - losses it could have to write down as permanent in the future.

It had total assets of $78.1 billion ...
Soverign Bancorp wasn't one of the 19 stress test banks (assets are less than $100 billion) and they are now owned by Banco Santander. But this is an example of the next tier of banks - and of more losses coming.

Sovereign Bancorp, Loans Held for Investment Click on graph for larger image in new window.

This pie chart shows the breakdown of loans by category that are held for investment ($53.7 billion) from Sovereign Bancorp's 10-Q SEC filing.

If we use the indicative loss rates from the Federal Reserve (more adverse scenario) for each loan category, this would suggest $4.0 to $5.3 billion in losses over the next two years. Note: this doesn't include losses on investment securities.

As an example, the two year indicative loss rate for CRE, nonfarm, non-residential are 7% to 9%. Sovereign Bancorp shows $10.4 billion in assets in this category (excluding C&D), and that suggests two years indicative losses of $730 to $940 million. Soverign might do better or worse depending on their portfolio, but this suggests there are more losses to come.

Tuesday, May 05, 2009

More Losses at GMAC

by Calculated Risk on 5/05/2009 09:26:00 AM

From Bloomberg: GMAC Reports $675 Million Loss as Loan Defaults Rise

GMAC LLC, the auto and home lender that received a $6 billion government bailout, reported a first- quarter loss of $675 million on surging loan defaults ...

New vehicle loans plunged 74 percent from a year earlier to $3.4 billion, an increase compared with the fourth quarter’s $2.7 billion, GMAC said. Auto loans more than 30 days past due rose to 3.1 percent in the first quarter from 2.4 percent in the same period a year earlier ...
GMAC is one of the 19 stress test banks.

Monday, April 20, 2009

BofA: $13.4 billion in Credit-loss provisions

by Calculated Risk on 4/20/2009 08:55:00 AM

From CNBC: BofA Tops Forecasts with Help from Merrill

While results topped analysts' forecasts, they were bolstered by one-time events, including a $1.9 billion gain from selling shares of China Construction Bank and $2.2 billion of gains tied to widening credit spreads.
...
Bank of America set aside $13.38 billion for credit losses in the quarter, up from the fourth quarter's $8.54 billion.
...
Credit quality deteriorated broadly as the economy weakened, housing prices fell and unemployment rose.

Net charge-offs rose to $6.94 billion from $2.72 billion a year earlier. Nonperforming assets more than tripled to $25.74 billion, and rose $7.51 from year-end.

Bank of America's credit card business lost $1.77 billion in the quarter.

"We continue to face extremely difficult challenges, primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment," Lewis said.
The confessional is still open.

Wednesday, March 11, 2009

Freddie Mac: $23.9 Billion Loss, Asks for $30.8 billion in funding

by Calculated Risk on 3/11/2009 04:56:00 PM

Press Release: Freddie Mac Reports Fourth Quarter and Full-Year 2008 Financial Results

Freddie Mac today reported a net loss of $23.9 billion ...

For the full-year 2008, the company reported a net loss of $50.1 billion ...

Fourth quarter 2008 results were driven primarily by net mark-to-market losses of $13.3 billion on the company’s derivative portfolio, guarantee asset and trading securities due to the impacts of spread widening and declines in interest rates. In addition, the company recorded $7.2 billion in credit-related expenses related to the continued deterioration in economic conditions during the fourth quarter, including a rapid deterioration in labor markets, steeper declines in home prices, and a drop in consumer confidence to record lows. Results were also impacted by security impairments on the company’s available-for-sale securities of $7.5 billion primarily due to sustained deterioration in the performance of the underlying collateral on the company’s non-agency mortgage-related securities.

... Pursuant to Treasury’s funding commitment under the Purchase Agreement, the Director of the Federal Housing Finance Agency (FHFA) has submitted a request to Treasury for funding in the amount of $30.8 billion. The company expects to receive such funds in March 2009.
emphasis added
The $30.8 billion in funding is in line with the announcement in January.

Wednesday, March 04, 2009

Toll Brothers: More Losses, No Pick-up in Activity

by Calculated Risk on 3/04/2009 06:48:00 AM

"We have not yet seen a pick-up in activity at our communities other than ordinary seasonal increases for this time of year."
Robert I. Toll, chairman and chief executive officer, March 4, 2009
Press Release: Toll Brothers Reports 1st Qtr 2009 Results
Toll Brothers ... today reported a FY 2009 first quarter net loss of $88.9 million ... which included pre-tax write-downs totaling $156.6 million.
...
Joel H. Rassman, chief financial officer, stated: "Given the numerous uncertainties related to sales paces, sales prices, mortgage markets, cancellations, market direction and the potential for and size of future impairments, it is particularly difficult in the current climate to provide guidance for the rest of FY 2009. As a result, we will not provide earnings guidance at this time."
...
FY 2009's first-quarter cancellation rate (current-quarter cancellations divided by current-quarter signed contracts) was 37.1% ...
Toll's normal cancellation rate is about 7%.

In summary: More losses. More write-downs. More cancellations. No guidance. No pick-up in activity.

Monday, March 02, 2009

AIG: $61.7 Billion Loss

by Calculated Risk on 3/02/2009 06:21:00 AM

For the Fed and Treasury AIG restructuring announcement, please see the previous post.

From MarketWatch: AIG reports fourth-quarter loss of over $61 billion

[AIG] said its fourth-quarter loss widened to $61.66 billion, or $22.95 a share, from the $5.29 billion loss in the year-earlier period. Continued severe credit market deterioration, particularly in commercial mortgage-backed securities, and charges related to ongoing restructuring-related activities weighed down results.
The numbers just keep getting bigger ...

Sunday, March 01, 2009

HSBC Update

by Calculated Risk on 3/01/2009 03:15:00 PM

As we discussed yesterday, AIG will not be alone in the confessional tomorrow. HSBC is about to announce a £17bn hit on bad loans.

Now the Financial Times reports: HSBC to scale back US lending

HSBC will on Monday announce plans to scale back its US consumer finance operations as the bank launches a £12bn-plus ($17bn) rights issue ... HSBC is expected to say that it is further shrinking HSBC Finance Corporation, its US-based credit card and mortgage lender ...
The WSJ has a headline only: HSBC plans to cease U.S. personal loans and mortgages but will continue to provide credit cards.

I'm sure HSBC regrets the Household International acquisition!

Saturday, February 28, 2009

HSBC to take £17bn Bad Loan Provision

by Calculated Risk on 2/28/2009 05:08:00 PM

From The Times: HSBC takes £17bn hit on bad loans

HSBC is to own up to the full horror of its American sub-prime business, Household, when it unveils a £7 billion goodwill write-off in addition to a £17 billion provision against rising bad loans.

The provisions will be announced tomorrow alongside a heavily discounted £12 billion rights issue – the biggest ever held in Britain – and a dividend cut ...

The fundraising will make HSBC the strongest bank in the world that has not received a cash injection from the state. Its tier-one ratio, a key measure of financial strength, will rise from 8.5% to 10.5%. Analysts say it will provide a $40 billion (£28 billion) buffer against further bad debts.
Oh, the horror! The confessional remains busy, and AIG will be dropping by on Monday.

Thursday, February 26, 2009

Fannie Mae: $25.2 Billion Loss

by Calculated Risk on 2/26/2009 06:11:00 PM

From Fannie Mae:

Fannie Mae reported a loss of $25.2 billion ... in the fourth quarter of 2008, compared with a third-quarter 2008 loss of $29.0 billion ...

On February 25, 2009, the Director of FHFA submitted a request for $15.2 billion from the U.S. Department of the Treasury on our behalf under the terms of the Senior Preferred Stock Purchase Agreement in order to eliminate our net worth deficit as of December 31, 2008. FHFA has requested that Treasury provide the funds on or prior to March 31, 2009.
...
We expect the market conditions that contributed to our net loss for each quarter of 2008 to continue and possibly worsen in 2009, which is likely to cause further reductions in our net worth.
The confessional is very busy ...

Friday, February 13, 2009

Lloyds: More HBOS Losses

by Calculated Risk on 2/13/2009 11:13:00 AM

From The Times: Lloyds dives on HBOS £10bn black hole

Lloyds Banking Group shares plunged 40 per cent this afternoon after it revealed a £10 billion black hole at HBOS, the struggling bank that it rescued last year.

Lloyds Banking Group ... [made] a surprise announcement ... that trading at HBOS had worsened in December, driving its losses up by a further £1.6 billion to £10 billion.
...
"It is no secret that the UK economy continued to decline in December, and this was reflected in today's numbers.” [Lloyds said in a statement]
...
Lloyds Banking Group said that the huge losses at HBOS owe to a £4 billion "impact of market dislocation" and about £7 billion of impairments in the HBOS corporate division.
A billion pounds here, a billion pounds there ...

Wednesday, February 11, 2009

Credit Suisse: $5.2 billion Loss

by Calculated Risk on 2/11/2009 02:12:00 AM

From Bloomberg: Credit Suisse Reports SF6.02 Billion Loss on Trading

Credit Suisse Group AG, Switzerland’s second-biggest bank, reported a 6.02 billion Swiss-franc ($5.2 billion) fourth-quarter loss on wrong-way trading bets and costs tied to cutting jobs and selling part of its fund unit.
...
“We have had a strong start to 2009 and were profitable across all divisions year to date,” [Chief Executive Officer Brady] Dougan said in a statement. “We have positioned our businesses to be less susceptible to negative market trends if they persist in the coming months.”
Another visit to the confessional.

Tuesday, February 10, 2009

UBS: $7 Billion Loss; to Cut 15,000 Jobs

by Calculated Risk on 2/10/2009 01:19:00 AM

Press Release: UBS Reports a Fourth Quarter Loss of CHF 8.1 Billion

Update: From the WSJ: UBS Posts Loss, Plans Job Cuts

UBS AG Tuesday reported a narrower fourth-quarter net loss and said it will cut 15,000 jobs by the end of this year in its loss-making investment bank.
The confessional is still very busy.

And oldie (Source: Jan-Martin Feddersen, Immobilienblasen)



Here is the actually UBS logo.

Monday, January 26, 2009

Amex: "Harshest operating environment in decades"

by Calculated Risk on 1/26/2009 04:47:00 PM

From the WSJ: AmEx Earnings Drop 79%

"Our fourth-quarter results reflect an operating environment that was among the harshest we have seen in decades," Chief Executive Kenneth I. Chenault said in a statement. He noted overall cardmember spending fell 10% year-over-year, or 5% excluding the impact of foreign-exchange rates.

Chenault added that the credit-card issuer remains cautious about the economic outlook through 2009, with expectations for cardmember spending "to remain soft with past-due loans and write-offs rising from current levels."
...
Delinquencies of 90 days or more rose to 3.1% of American Express's managed U.S. lending portfolio, from 1.8% in the prior year. The portfolio's write-off rate climbed to 6.7% from 5.9% in the third quarter and 3.4% in the prior year.
In other bleak news, regional bank Zions Bancorp reported a loss: Zions, Stung by Crunch, Books Loss
Zions Bancorp swung to a fourth-quarter loss as credit quality continues to sink and the company took a $353.8 million in write-downs on past acquisitions and investments.
...
Loss-loan provisions soared to $285.2 million from $156.6 million in the third quarter and $70 million a year earlier. Net loan and lease charge-offs climbed to 1.71% of annualized average loans from 0.91% and 0.28%, respectively. Non-performing assets, loans on the verge of going bad, surged to 2.71% of net loans and leases and other real estate owned from 2.2% and 0.73%.
And more layoffs too, from MarketWatch: Texas Instruments reports a big profit drop, will cut 3,400 . I've lost count, but there have to be well over 50,000 jobs cuts announced today in the U.S.

Thursday, January 22, 2009

Capital One, Synovus: Higher Charge-offs

by Calculated Risk on 1/22/2009 05:10:00 PM

Two different markets: Capital One is being hit by higher credit card charge-offs and Synovus is being hit by residential construction and development losses. The result is the same ... a visit to the confessional.

Press Release from Capital One:

Economic deterioration intensified during the fourth quarter, driving increasing delinquency and charge-off rates across all of our lending businesses. The fourth quarter charge-off rate in the U.S. Card business was 7.08%, in line with the expectations conveyed last quarter. The company now expects that the U.S. Card charge-off rate for the first quarter of 2009 will be around 8.1%, rather than the mid 7% range previously communicated. The change in outlook is primarily the result of declining balances and adverse credit performance of closed-end, unsecured loans that are included in the U.S. Card subsegment. Auto Finance delinquencies and charge-off rates increased in the quarter as a result of seasonality, economic worsening, declining loan balances, and the impact of sharply falling used car auction prices.
"Economic worsening"?

And from Synovus:
“As the economy continued to deteriorate in the fourth quarter, credit quality in the residential construction and development portfolios, especially in Atlanta, continued to weaken,” said Richard Anthony, Chairman and CEO.
...
The ratio of nonperforming assets to loans, impaired loans held for sale, and other real estate was 4.16%, as of December 31, 2008, compared to 3.58% last quarter.
...
The net charge-off ratio for the quarter was 3.25% compared to 1.53% last quarter.
Doubled in one quarter!