Belt-tightening Bank of America loses top spot
Source: Bloomberg News |
October 19, 2011, Wednesday
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Print Edition
Print Edition
BANK of America lost its ranking as the largest US lender by assets as Chief Executive Brian Moynihan cut jobs and sold units and rival JPMorgan Chase expanded.
JPMorgan's total assets increased 1.9 percent in the third quarter to US$2.29 trillion, while Bank of America yesterday reported a 1.8 percent decrease to US$2.22 trillion. Wells Fargo was the largest by market value at Monday's close in New York.
Bank of America became biggest by assets under former chief executive Kenneth Lewis through acquisitions, including credit-card issuer MBNA and home lender Countrywide Financial.
Both were the largest in their industries and later triggered writedowns that contributed to six quarterly losses since mid-2008.
"Bank of America is behind JPMorgan," said Jefferson Harralson, an analyst at investment firm Keefe, Bruyette & Woods.
"Their capital levels are 200 to 300 basis points behind JPMorgan. Their ability to pay a dividend is eight to 12 quarters behind. The acquisition of Countrywide was a key determinant in this."
Moynihan has been shutting branches and selling assets as the bank prepares for new capital requirement rules. He said last month he would eliminate about 30,000 jobs after consumer protection rules squeezed revenue from debit and credit cards.
JPMorgan's total assets increased 1.9 percent in the third quarter to US$2.29 trillion, while Bank of America yesterday reported a 1.8 percent decrease to US$2.22 trillion. Wells Fargo was the largest by market value at Monday's close in New York.
Bank of America became biggest by assets under former chief executive Kenneth Lewis through acquisitions, including credit-card issuer MBNA and home lender Countrywide Financial.
Both were the largest in their industries and later triggered writedowns that contributed to six quarterly losses since mid-2008.
"Bank of America is behind JPMorgan," said Jefferson Harralson, an analyst at investment firm Keefe, Bruyette & Woods.
"Their capital levels are 200 to 300 basis points behind JPMorgan. Their ability to pay a dividend is eight to 12 quarters behind. The acquisition of Countrywide was a key determinant in this."
Moynihan has been shutting branches and selling assets as the bank prepares for new capital requirement rules. He said last month he would eliminate about 30,000 jobs after consumer protection rules squeezed revenue from debit and credit cards.
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