Financial stocks were broadly higher today with the NYSE
Financial Sector Index advancing about 0.8% and the S&P
Financial 100 Index posting a 1.0% gain.
In company news, Doral Financial Corp (
) Monday was again posting strong gains, with shares today adding
as much as 45% after the bank said it has asked the Commonwealth of
Puerto Rico to immediately repay $229.9 million in tax receivables
owed the bank by the government.
Under terms of a March 2012 agreement, the Puerto Rican
government agreed with DRL contentions it overpaid taxes in prior
years, with the bank immediately recognizing a $100 million tax
benefit due to release of deferred tax asset reserves along with
adding around $200 million to its Tier I capital levels.
The Federal Deposit Insurance Agency, however, late last month
told DRL it could no longer include the tax receivables in its Tier
1 capital calculations, effectively reducing its Tier 1 capital by
over 42% to around $390 million. The FDIC decision sent DRL shares
into a steep swoon, falling nearly 81% from a $9.82 a share close
on May 1 to an intra-day low of $1.87 last Wednesday, May 8.
In its May 9 letter to Puerto Rico's Department of the Treasury
released today as part of a regulatory filing, DRL officials said
they intend to exercise any and all legal remedies available to
enforce collection, also requesting a meeting "as soon as possible"
to discuss the repayment request and "to understand the
Department's timeline for meeting its payment obligations."
DRL shares were ahead 47% at $4.44 apiece in late Monday trade,
just 2 cents off its session high. The stock spiked nearly 59% on
Friday, closing at $3.02 a share, with the bank issuing a
mid-session statement that it was company policy not to comment on
unusual stock movements.
In other sector news,
(+) HDB, Together with a 3.9% gain for rival ICICI Bank (
), shares of Indian bank companies were rising on the final day of
parliamentary voting that began April 17. Results are scheduled to
be announced on Friday.
(-) AGM, Q1 core earnings of $0.97 trails analyst estimates by
$0.19 per share. Total revenue declines 8.7% to $30.3 mln, lagging
forecasts by around $4.22 mln.
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