Financial Services Industry Archive

Insurance firms can handle hurricane losses, but a hurricane of a different sort has been brewing in Florida. Insurers such as State Farm, the largest U.S. home insurer, have folded their tents and left, complaining that they can’t compete with the Sunshine State’s own cut-rate insurance program. But there are signs that the tide is turning. A bill to allow insurers to set their own...

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Just when you thought it wasn’t possible, bank accounting has gotten a whole lot weirder. While Goldman Sachs changed its reporting calendar to shrug off a $1.5 billion loss in December, JP Morgan Chase reported a fall in the price of its bonds as a profit. Meanwhile, here on BNET Finance, David Phillips points out that Citigroup managed to post $1.6 billion in net income by betting...

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As the May 4 deadline for the results of banks’ stress tests draws closer, the criticism is piling up. “[Government officials] have gotten themselves in a pickle on this thing,” one banking analyst told the Los Angeles Times this week in a statement characteristic of the criticism. “It’s clear they didn’t think through how this was going to play out.”...

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Citigroup posted revenues of nearly $25 billion and net income of $1.6 billion for the first quarter of 2009. A review of the earnings release suggests, however, that the financial service provider’s performance gains had more to do with fuzzy math than an embrace by loyal customers of the Citi franchise: Tier 1 capital ratio on the balance sheet climbed 410 basis points year-on-year to 11.8...

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U.S. banks are becoming dominant in the highly profitable investment-management industry, almost in spite of themselves. Like Chauncey Gardiner in the novel Being There, many of these banks find themselves in this enviable position mostly out of sheer luck. The credit crisis dumped billions in lucrative high-net worth, pension and retail mutual fund assets into the laps of U.S. depository...

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Finally, disparities between the opinions of investment banking analysts and credit ratings agencies are beginning to emerge. That may be one of the most underrated signs of the industry’s improving health out there right now. A recent example: Citigroup vs. Moody’s In the financial services sector recently, Citigroup analysts are getting almost as bullish as the bank’s...

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Financial institutions have been using a whole array of tricks to boost earnings for the first quarter and beat analysts’ estimates, but the revised accounting rules on mark-to-market, which was supposed to smooth unrealized losses, hasn’t been one of them. Maybe for the simple reason that it won’t improve earnings results all that much, as some firms like State Street said...

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Eliot Spitzer has become a media darling. A columnist for Slate, appearing on the Today show, on MSNBC and, oh yes, in Newsweek. He’s here, he’s there, he’s everywhere. What’s amazing is that the former New York governor is apparently his own PR machine, doing this without spinmeisters like Howard Rubinstein or Hill & Knowlton. And he is bouncing back fast from...

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J.P. Morgan, like Goldman Sachs a few months ago, impressed investors by issuing bonds without government backing. But building up confidence in the markets isn’t the only reason to do so. Some banks like BB&T have reported better-than-expected earnings results for the first quarter, fueling confidence in parts of the capital markets. J.P. Morgan not only beat earnings forecasts, but...

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U.S. life insurance companies are asking for a federal bailout to prevent a capital crisis — but they’re also still pushing complex benefit guarantees that could threaten the industry’s viability for years to come. First, some background. These products, generally known as “guaranteed minimum benefits,” have played a big role boosting sales of variable annuities by...

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