大型银行业年报亮点

1、 CORE Equity Research | Bank Brief8 April 2019Jason M. Goldberg, CFA+1 212 526 8580 HYPERLINK mailto:jason.goldberg jason.goldbergBCI, USCompleted: 08-Apr-19, 17:46 GMTReleased: 08-Apr-19, 17:46 GMTBARCLAYS CLASSIFICATION: Restricted - ExternalBank Brief BonusLarge-Cap Bank Annual Report HighlightsO

2、verviewOn Friday, MS and STT published their 2018 Annual Letters, rounding out our coverage. As usual, BK will kick off the annual meeting circuit for our coverage tomorrow. Below, we provide the date, time and location of each companys annual meeting and a summary of each CEOs annual letter (comple

3、te calendar toward the end of this e-mail). Recall, we previously provided concise summaries for each companys Form 10-K (see: HYPERLINK /go/publications/link?contentPubID=FC2442395 2018 Form 10-K Company Summaries, 3/4/19).Common themes in this years annual letters include: the need for continued a

4、daption to the changing technology backdrop, the desire to control costs and achieve positive operating leverage, active capital management, and pristine asset quality. Still, several letters were more geared for an environment where interest rates are on the rise. We were pleased to see many letter

5、s list several opportunities for organic growth, albeit to varying degrees, with an emphasis on fee income. The regional banks also highlighted reduced regulatory burdens.Ally Financial (ALLY) signed by Jeffrey J. Brown, CEO Annual meeting: May 7 at 9:00am in Detroit, MILooking ahead: ALLYs business

6、 reflects the future of banking. Over half of its new deposit customers in 2018 were millennials, a digitally-savvy demographic segment that is expected to benefit from an intergenerational wealth transfer of $30trn, driving financial services for decades. It views the multitude of financial institu

7、tions, both new and old, that have emulated its digital and customer- centric approach to banking as the ultimate compliment, and affirmation of what it has known for a long time.2018 financial results: ALLY posted the best results since becoming a public company across multiple financial and operat

8、ional metrics. Its auto business posted $35.4bn of consumer originations and growing pre-tax income by 12% relative to 2017. ALLY has been successful in executing a very deliberate strategy to diversify the composition and sourcing of auto originations while optimizing risk-adjusted returns. Along t

9、hose lines, it increased its non-RV dealer base, and the application volume from those dealers, every year since 2014. In 2018, it processed 11.6mn applications, or more than 30k applications on an average every day. Its growth channel accounted for 46% of consumer originations in 2018, compared to

10、just 20% in 2014. Its insurance business had a great year in 2018, posting strong written premium growth while diversifying its dealer base and introducing new and innovative products under the Ally Premier Protection brand. Its corporate finance business also posted solid results, with total assets

11、 growing 17% while experiencing strong credit performance across a highly diversified middle-market portfolio. ALLY expects corporate finance to be a source of enhanced returns and profitability in the future. Its retail deposit business was resilient in the face of heightened competition, growing b

12、alances $11.2bn while adding 230k customers, the highest annual customer growth since the inception of Ally Bank.Funding: It continued to drive higher deposit balances while minimizing funding from wholesale markets. In 2018, it has $3.6bn of institutional unsecured debt mature at a weighted average

13、 coupon of 4.3%. It has another $3.7bn scheduled to mature during 2019 and 2020 with a weighted average coupon of 5.3%. Longer term, as it approaches its stated goal of deposits representing 70-75% of its funding profile, it expects to have a greater opportunity to optimize the financial benefits of

14、 its deposit base.Positioning for the future: ALLY continued to prudently enhance the capabilities and customer experience within its Ally Invest and Ally Home businesses and saw encouraging customer trends in both franchises. ALLY operates largest branchless bank in the U.S., and made investments a

15、cross both its core and growth businesses. It rolled out new functionality within Ally Invest, enhanced the fulfillment process at Ally Home, leveraged machine learning within the deposits business, and made improvements to its auto underwriting and servicing capabilities. As a company, ALLY remains

16、 intensely focused on protecting customer data. Cybersecurity is a foundational element of its enterprise risk management and an obligation of every ALLY associate.Efficient capital management: Its capital management strategy balances returning capital to shareholders with investing in its businesse

17、s. It is well-positioned to leverage its brand and national scale to create and grow new businesses in response to customers demands. Meanwhile, its stock continued to trade below book value throughout most of 2018, creating compelling opportunities for share repurchases. Given those two dynamics, A

18、LLY prioritized customers, providing them with the products and user experience they expect and then taking advantage of the market opportunity to repurchase its shares. Going forward, ALLY expects to continue toprovide core businesses with what they need to maintain their leading market positions a

19、nd generate attractive risk-adjusted returns, while also supporting growth businesses and actively returning capital to shareholders.Bank of America (BAC) signed by Brian Moynihan, Chairman & CEO Annual meeting: April 24 at 10:00am in Charlotte, NCBackdrop for 2019: The U.S. economy remains resilien

20、t and is growing. BACs economists view in February called for U.S. GDP growth of 2.2% in 2019, and world GDP growth of 3.4%. It views the U.S. consumer health as solid, on the back of 9% growth in its U.S. customers spending and money transfers through BAC channels in 2018. Business and consumer con

21、fidence levels also remain solid. BAC sees good opportunities ahead as it deepens its relationships, and add new ones, in each of its businesses.Four tenets of responsible growth: 1) Grow and win in the market. No excuses: each of its eight lines of businesses grew in 2018; 2) Growing by focusing on

22、 customers: consumer business benefitting from customers embracing digital banking; 3) Growing within risk framework: NCOs ratio declined in 2018, operational risk in check; 4) Delivering sustainable responsible growth: sharing success with its communities; striving to be a great place to work for i

23、ts employees; and driving operational excellence.Focusing on employees: BAC hired more than 27,000 new teammates in 2018 (including 3,500-plus college grads) and helped 17,000- plus employees find new roles in the bank. Still, its aggregate headcount was 204k employees at the end of 2018 (down 2% fr

24、om209k employees at the end of 2017).Investing in franchise: Key areas of investment include adding relationship managers in Global Banking, improving digital and mobile capabilities across all client segments, investing in benefits for employees, and increasing philanthropy.Expenses and technology:

25、 Since 2010, BAC invested $25bn in new technology initiatives. It reworked all of its major systems and added innovative capabilities, and built internal cloud and software architecture to increase speed and efficiency. For 2019 and 2020, BAC expects expenses to remain flat even while it is making n

26、ew investments.Retail banking: In 2018 BAC expanded its presence in 25 markets, including its newest Denver, Minneapolis, and Indianapolis. BAC also entered the Pittsburgh market in 2018, and plans to open its first financial center in Salt Lake City in early 2019. In addition to opening 81 new fina

27、ncial centers in 2018, BAC also renovated 567 existing ones. It plans to redesign over 2,500 financial centers by 2021 (out of total 4.3k). Currently, BAC covers more than 80% of the U.S. population with its retail branch footprint. With the scheduled investments, it expects to expand that coverage

28、to 90%-plus.ESG goals: BAC is more than halfway through its 10-year, $125bn Environmental Business Initiative, supporting clients and others who are helping create a sustainable energy future. BAC also focuses on its own sustainable facilities management and improved energy efficiency it has set a g

29、oal to be carbon neutral by the end of 2020.BB&T Corp (BBT) signed by Kelly S. King, Chairman & CEO Annual meeting: April 30 at 11:00am in Charleston, SCMOE with STI: The combination with STI is expected to allow BBT to invest substantially more in technology, enhancing its levels of trust and confi

30、dence with clients. The transaction is expected to close late in the third or fourth quarter of 2019.Bold action is needed: Since 1995, 15 of the largest 25 banks in market capitalization no longer exist because they failed to change, or changed too slowly. During this same time period, BBT has move

31、d from 36th to 9th. Even as BBT moves to sixth-largest with the STI merger, it doesnt expect to be complacent.Boosting efficiency: Banks that advance technology in client-facing and back-office areas should win in this new era. To fund these changes, BBT is boosting efficiency. In the last three yea

32、rs, BBT reduced its number of branches by 20%, the square footage of other offices by 15% and its electricity usage by 20%. BBT is increasing efficiency throughout the company with initiatives ranging from reinventing its lending process to realigning management. With STI, it expects to surpass all

33、of its peers in a key efficiency measure.BBT is guided by several key principles: 1) Changing the conversation with clients: Rather than simply selling products and services, engage with clients to develop a deep understanding of their needs and goals. 2) Streamlining and simplifying delivery of pro

34、ducts and services: Nearly half of its new accounts and a quarter of its mortgage applications are secured digitally. BBT has stepped up its social media presence to connect with BBTs new clients, who have a median age of 34. 3) Diversifying its operations: Following STI MOE its combined 17-state fo

35、otprint, and Washington D.C., is projected to grow faster than any of its peers. 4) Efficient execution: Process improvements allowed BBT to shorten the time to make an equipment loan from 28 days to three days. 5) Leveraging leadership training: On its new Leadership Institute campus, opened in 201

36、8, BBT is sharing its proven methods to create effective leaders with clients and educators.; and 6) Rewarding shareholders: BBTs total shareholder return above peers in 2018. It increased dividend in 2018, and expects its MOE with STI to further enhance returns.BNY Mellon (BK) signed by Charlie Sch

37、arf, Chairman & CEO Annual meeting: April 9 at 9:00am in New York, NYFocused on organic growth: While BKs business benefits from rising interest rates and from growing financial markets, it remains focused on driving organic growth. Across its businesses, it is separating out those external factors

38、to identify how much of its growth is organic. It noted that some businesses are ahead of others in this evolution. Such businesses that have been exhibiting organic growth include: Clearance and Collateral Management: BK is in a unique position as the sole provider of U.S. government clearing coupl

39、ed with over $3trn of triparty collateral management balances allowing it to help clients optimize their funding needs in ways that others cannot. Markets: it has been investing in its FX platform and expanding the scope of its product offering. Its updated platform and product lineup has enabled it

40、 to capture a greater share of its clients business. LDI: it has seen strong growth in its LDI offering in Asset Management as it continues to tailor solution to meeting the specific needs of pension fund and insurance clients.Cash and Liquidity: capabilities span the entire company and represent mo

41、re than $900bn of client balance.Not being complacent: Other businesses have shown growth, but have been heavily reliant on external factors, like rising interest rates and financial markets. BK is not being complacent about this and believes it can do more to grow organically and is taking action.

42、In Asset Servicing, BK has faced continued pricing pressure. Still, it has significant scale benefits that it continues to realize and is making investments to provide data management solutions and expand its servicing of ETFs and alternatives. It is actively working with external partners for open

43、solutions and advancing its own solutions to increase quality, reduce cost and provide more information to our clients. In Pershing, recent performance has been muted after losing two large clients. Still, BK sees a significant opportunity to accelerate organic growth in both the traditional broker-

44、dealer channel and in the emerging RIA space. Its pipeline of signed new clients being on boarded is the largest in many years. Its Treasury Services business has new leadership in place and sees significant opportunity for organic growth by reorienting the business around its differentiated payment

45、s capabilities. Wealth Management also has new leadership in place and BK sees opportunities to grow by strengthening its client-facing teams and building out its banking and investment offerings to provide more holistic solutions to its clients. In Corporate Trust, the new management team has repos

46、itioned its sales and service teams which have yielded incremental growth in growing asset classes (CLOs and insurance-linked securities). In Asset Management, BK is working on abating recent outflows (particularly in active strategies) by developing distinctive multiasset capabilities that deliver

47、solutions for its clients. Its repositioning and consolidating its business in North America into one multi-asset company called Mellon. Given the operating leverage in across its businesses, small increases in revenue growth rates should drive more meaningful increases in its EPS growth.Continuing

48、to drive efficiency and invest: BK is focused on efficiency and using cost savings to fund its tech spend. In 2018, BK increased what it spent on technology from $2.4bn to $2.75bn. It expects it again to increase to $3.0bn in 2019. The increase in spend is directed to hardware and software for its e

49、xisting infrastructure and to building additional capabilities. Such investments are going to: consolidating its remaining custody platforms; improving transparency intra-day into performance for clients; upgrading its platform for servicing traditional loan and CLO products in Corporate Trust; buil

50、ding new capabilities to better support alternative asset managers; redesigning its client portal to offer an integrated experience across all devices to further penetrate the RIA opportunity in Pershing; building a fully integrated Wealth Management platform across investments and banking that incl

51、udes selfservice capabilities; continuing to extend its capabilities to service wealth managers in the UK through Pershing; increasing its investment in ETF servicing infrastructure; and extending LDI capabilities in the U.S.Capital One Financial (COF) signed by Richard D. Fairbank, Chairman, CEO &

52、President Annual meeting: May 2 at 10:00am in McLean, VABanking Reimagined: To see the future of banking, COF didnt look at how banking worked or what other banks were doing. It looked instead at how technology was changing its customers lives. Banking is an inherently a digital product, and its des

53、tination should be the same. Consumers demand instant solutions customized to them. For years, COF has been building a leading technology company that can thrive in a world being revolutionized by software and data. Today, 85% of its technology workforce are engineers. COF has embraced advanced tech

54、nology strategies and modern data environments.Empowering customers with great digital experiences: Building on years of foundational investments, COF continued to accelerate the delivery of brand-defining customer experiences in 2018. Each month, tens of millions of customers visit COFs online and

55、mobile customer servicing platform. For the second year in a row, COF was awarded the J.D. Power award for the “Highest in Overall U.S. Banking App Satisfaction.” It is harnessing credit card transaction data and machine learning to deliver proactive insights to customers about their spending and to

56、 help detect problems they might miss.Businesses are well positioned to thrive: For each of its businesses, COF tried to identify the winning model of the future and then tried to build that. Its credit card business is powered by data and analytics and a passion to help people use credit wisely. CO

57、F serves tens of millions of customers across the credit spectrum. It continued to invest heavily in rewards products, marketing programs, and digital experiences to attract and serve heavy spenders. In 2018, the card business delivered record returns, resilient growth, and continued operating effic

58、iency gains. In July, it announced a long-term agreement to be the exclusive issuer of co-branded and private- label credit cards for WMT. And in January 2019, it announced an agreement to acquire $9bn of existing WMT credit card loans at a “favorable” price and terms. One of the last parts of banki

59、ng to be transformed will likely be local banking and deposits. On the shoulders of its technology transformation, COF is building the retail bank of the future. With virtually every banking service now available online or in its mobile app, COF is making digital banking easy. In the late 1990s, COF

60、 saw that auto lending was ripe for transformation. Now, Auto Navigator from COF allows consumers to search millions of cars at dealers across the country, and instantly get pre-qualified for financing, customized to them.Invested to grow the franchise: In 2018, COF spent $2.2bn on marketing and adv