Six Giant Banks Made $51 Billion Last Year; The Other 980 Lost Money

Vatic Note:  I am too mad to make any comments about bailouts, thieving from our seniors retirements etc etc etc.... ownership in BP,  ownership in toxic oil dispersements,  ownership in 96% of the MSM,  see?  That is why I don't want to comment as its rehashing what we all know, but its outrage to look at their bottom line numbers in profits that we didn't get to share as taxpayers who fronted the bailout for generations to come, and yet Goldman sachs was the biggest beneficiary of the AIG bailouts, all of them under Bush and Obama.  So, maybe 300 million people will just say "no" to them when they try to collect.  I suggest we give them a bill and tell them to pay our taxes for us until they pay us off.   After what Jim Tucker from the Bilderberg meeting just said, about taxing us and making us a welfare state like Europe, I am looking at these figures below and going NO FRIGGEN WAY are we paying any more taxes or allowing anymore taking of our wealth from our hard earned labor to support a bunch of welfare queens at the top of the totem pole.  If its to help our people for real that is different, but right now there isn't sole in that congress with one ounce of humanity or compassion for anyone at the bottom.   Screw them, we take our money back and they can go fight their wars and use their children and their wealth, NOT OURS ANYMORE.  JUST LOOK BELOW AND SEE HOW OBSCENE THAT IS.  If that doesn't make you mad nothing will.


Six Giant Banks Made $51 Billion Last Year; The Other 980 Lost Money
http://www.forbes.com/2010/06/03/goldman-sachs-citigroup-markets-lenzner-morgan-stanley_print.html


Robert Lenzner, 06.03.10, 4:25 PM ET
StreetTalk With Bob Lenzner


Focus hard on this shocking Wall Street reality: The top six bank holding companies earned an aggregate of $51 billion in pretax income in 2009. We're talking about JPMorgan Chase, Goldman Sachs, Bank of America, Morgan Stanley, Citigroup and Wells Fargo.

All of this pretax income can be attributed to their trading revenues of $59.7 billion. The proprietary trading operations of an oligopoly of banks, saved from disaster by Uncle Sam's largesse and subsidized with cheap money from the central bank, was the single driving force behind the restoration of their fortunes and the renewed surge in their stock prices.

For those willing to go long when the outlook was the bleakest, they've banked a double in JPMorgan Chase, scored a quadruple in Citigroup and nearly a quintuple in BofA.

Some of the other 980 bank holding companies--like Bank of New York Mellon, PNC Financial Services, U.S. Bancorp and M&T Bank--lost an aggregate of $19 billion for the 2009 year. Bank of New York Mellon had the seventh-largest trading revenue--it was just 1.6% of the total. By comparison, Goldman Sachs had 36.2%, Bank of America 18.8%, JPMorgan Chase 15.4%, Morgan Stanley 11.3%, Citigroup 6.9% and Wells Fargo 4.2%.

Trading Revenue at U.S. Bank Holding Companies in 2009

All data from December 2009 FR Y-9C filings. Dollar amounts in millions.

Total Assets, Dec. 31, 2009 Trading Revenue As a Percentage of Industry Trading Revenue

1 Goldman Sachs Group $849,278 $23,234 36.2%

2 Bank of America 2,224,539 12,067 18.8%

3 JPMorgan Chase 2,031,989 9,870 15.4%%

4 Morgan Stanley 771,462 7,279 11.3%

5 Citigroup 1,856,646 4,448 6.9%

6 Wells Fargo 1,243,646 2,674 4.2%

7 Bank of New York Mellon 212,336 1,032 1.6%

8 State Street 156,756 598 0.9%

9 Northern Trust 82,142 508 0.8%

10 MetLife 539,314 361 0.6%

11 GMAC 172,313 173 0.3%

12 PNC Financial Services Group 269,922 170 0.3%

13 U.S. Bancorp 281,176 163 0.3%

14 Fifth Third Bancorp 113,380 125 0.2%

15 SunTrust Banks 174,166 100 0.2%

Sum: Top 15 Banks by Trading Revenue 62,803 97.8%

Remaining Bank Holding Companies 1,399 2.2%

Total: All Bank Holding Companies (986 banks) 64,202 100.0%

Even more fascinating for public policy reasons, Goldman Sachs' trading revenue was 119% of its own pretax income. Bank of America's trading was 262.8% of its pretax income and Morgan Stanley's trading was an incredible 849.4% of its pretax income.
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Trading Revenue at U.S. Bank Holding Companies in 2009

All data from December 2009 FR Y-9C filings. Dollar amounts in millions.

Total Assets, Dec. 31, 2009 Trading Revenue Pretax Income As a Percentage of Pretax Income

1 Goldman Sachs Group $849,278 $23,234 $19,451 119.4%

2 Bank of America 2,224,539 12,067 4,592 262.8%

3 JPMorgan Chase 2,031,989 9,870 16,149 61.1%

4 Morgan Stanley 771,462 7,279 857 849.4%

5 Citigroup 1,856,646 4,448 (7,799) N/R

6 Wells Fargo 1,243,646 2,674 17,998 14.9%

Top 6 Aggregate 59,572 51,248 116.2%

7 Bank of New York Mellon 212,336 1,032 2,626 * 39.3%

8 State Street 156,756 598 2,527 23.7%

9 Northern Trust 82,142 508 1,255 40.5%

Trust and Custody Banks Aggregate 2,139 6,408 33.4%

10 MetLife 539,314 361 (2,798) N/R

11 GMAC 172,313 173 (7,939) N/R
534 (10,737) N/R

12 PNC Financial Services Group 269,922 170 3,324 5.1%

13 U.S. Bancorp 281,176 163 2,632 6.2%

14 Fifth Third Bancorp 113,380 125 767 16.3%

15 Sun Trust Banks 174,166 100 (2,450) N/R

Banks Nos. 12 to 15 Aggregate 558 4,273 13.1%

Remaining 971 Bank Holding Companies Aggregate 1,399 (19,284) N/R

All Bank Holding Companies (986 banks) Aggregate 64,202 31,908 201%

* Excludes $4.8B in securities losses related to restructuring of Bank of New York Mellon's investment securities portfolio in Q3 2009. "N/R" = Not relevant.

Trading profits--better known in the proposed financial reform legislation as proprietary or "prop"--trading are the target of former Fed chief Paul Volcker's crusade to prohibit or severely limit bank holding companies that have public deposits from this speculative activity.

Wall Street's gravy train is in danger of being hijacked. Investors beware; the Volcker rule is the single biggest threat to the share price of the oligopoly. Another threat is the cap on future growth of the oligopoly.

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The bill requires Federal Reserve approval for bank holding companies with assets over $50 billion before they can acquire a wide range of other nonbank financial companies, like asset managers with more than $10 billion in assets. Just how big a threat is clear from first-quarter 2010 earnings: Trading revenue at Goldman Sachs increased by 61% to $9 billion; Bank of America and JPMorgan Chase saw their trading revenue more than double from 2009.

Even more amazing, Goldman Sachs, Bank of America and JPMorgan Chase did not lose money during any single trading session of the 2010 first quarter. This astonishing performance underscores the casino the oligopoly has become. It bears testament to the payoff from the Wall Street bailout of 2008, which resulted in the elimination of competition and the concurrent strengthening of the few giants left standing.

They have taken advantage of their opportunity to grow more powerful by absorbing crippled institutions like Merrill Lynch and Wachovia. JPM's trading revenue is up 127% over a year ago; Morgan Stanley's is up 176%. Citigroup's and Wells Fargo's revenues from trading are down roughly 30% each.

Public policy has benefited the oligopoly at the cost of hurting some of the other 980 bank holding companies in the nation. The financial overhaul bill unfairly penalizes any bank with more than $50 billion--even if it is a retail bank serving Main Street, making loans to small business and mortgages to ordinary people, not billionaire hedge fund managers.
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It's just plain unfair to subsidize the oligopoly while penalizing the regional banks with a tax to prepare for the next too-big-to-fail episode. Because sooner or later a member of the oligopoly is going to climb out on a limb and need rescuing.

Maybe the price-earnings multiple and the premium over book value for this oversized oligopoly should be penalized by the marketplace. Burst the potential bank bubble now.

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