Financials Weekly Notes: BofA, JPMorgan And UBS

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Bank shares were muted this week as investors tempered their ebullience last week. Last week's surge saw bank stocks jump by at least 5% over growing optimism of a global economic recovery after the ECB and the Fed both separately announced plans to buy-back bonds to ensure liquidity in the system (see Banks Lead U.S. Markets To Highest Level Since 2007 ). But the picture did not remain so rosy when doubts were raised earlier this week about the sufficiency of QE3 to revive the slowing U.S. economy. The view that additional fiscal steps will be needed to complement QE3 forced investors to rethink their enthusiasm towards the equity market. Later in the week, worse-than-expected economic indicators for the Eurozone only added to the aversion.

There were notable events to report for Bank of America ( BAC ), JPMorgan Chase ( JPM ) and UBS ( UBS ) this week.

Bank of America

Bank of America is looking to slim down more quickly than it had announced earlier, with the U.S. financial giant apparently planning to do away with as many as 16,000 jobs by the end of the year. The job cuts which are a part of the ongoing Project New BAC will bring the bank's employee base to around 260,000 - its lowest since 2008. The bulk reduction in jobs would also mean that Bank of America will no longer remain the largest U.S. banking employer, most likely giving away that honor to JPMorgan Chase.

If Bank of America goes through with this accelerated slimming plan, it would have slashed 30,000 jobs in about 15 months - fulfilling the target announced as a part of Project New BAC last September.

See our full analysis for Bank of America

JPMorgan Chase

Regulatory pressure on the country's largest bank continues to mount, with the Federal Energy Regulatory Commission (FERC) directing the bank's power trading arm - J.P. Morgan Ventures Energy Corp. - to prove that it hasn't violated any regulations and to also justify why its energy trading authorization should not be cancelled. JPMorgan Chase is already under a Senate probe over the multi-billion dollar hedging loss it suffered over Q1-Q2 2012 - the findings of which are expected to be published later this year.

See our full analysis for JPMorgan Chase

UBS

The largest Swiss bank may lose as much as 10% of the assets it currently manages for its European clients in Switzerland-based offshore accounts, according to the bank's wealth management head Juerg Zeltner. The significant outflow in the assets under management is expected to be the direct result of the series of tax agreements Switzerland has entered with European nations which alleged that the country's banking system allowed foreign nationals to evade taxes. UBS manages about $300 billion worth of assets from European clients, and this figure could shrink by CHF 12-30 billion ($13-32 billion) over coming years.

You can read more about this in our article: Tax Agreements Could Shrink Swiss Bank Client Assets By 10%.

See our full analysis for UBS

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: BAC , C , CS , JPM , UBS

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