Below we present a summary of key updates that might be of
interest to investors interested in financial stocks. We look at
potential losses from storms for AIG (
), Bank of America's (
) struggle to settle mortgage bonds and the Fed's announcement
which sent Visa (NYSE:V) and MasterCard's (NYSE:MA) stock to a new
AIG will face costs of about $500 million from U.S. storms
in April and May that are likely to pressure property-
and-casualty margins in the second quarter, according to Jimmy
Bhullar, an analyst at JPMorgan.
Federal Reserve is halting its sales of mortgage bonds
which it acquired in the rescue of AIG after coming under
criticism that auctions were damaging credit markets. The Fed has
earlier rejected a $15.7 billion bid from AIG for the entire
Bank of America
Big banks like Bank of America and JPMorgan are cutting the debt
and easing the mortgage terms for tens of thousands of
borrowers who have not even asked for help but whom the banks
deem to be at special risk.
Bank of America entered into an $8.5 billion
settlement with investors who took a beating on mortgage bonds
issued by Countrywide before the housing market collapsed.
The bank also will swallow an additional $5.5 billion to buy
back other defective mortgages in the future. It has already
taken a $6.6 billion hit for lawsuits, foreclosure snarls, a
write-off in the value of its mortgage business and loan-servicing
Of the top 23 credit card issuers, Bank of America delivers the
highest level of security according to a Javelin study.
The Federal Reserve announced its final decision
on the regulation of debit-card swipe fees. The new fee is set at
$0.21, a little less than half the fee currently charged by banks
on debit card transactions, but it is nearly double the $0.12 that
the Fed had initially proposed. Shares of Visa and MasterCard
jumped to a new high after the decision was announced.