Monday, November 20, 2006

massive warning from fifth third bncp

they call it " Balance Sheet Actions". why not just say that they can´t sell some of the mortages that are available for sale. unfortunatly for "fitb" the mbs market isn´t buying all the crap to skyhigh prices anymore. despite they hide the news in " available for sale" it is in fact a writedown. this is a massive warning. (after hours the stock is down a massive...... 2%)

die bank nennet es "Balance Sheet Actions" warum könnt ihr nicht einfach sagen das ihr eure problembehafteten hypotheken nicht mehr wie in den jahren vorher ohne probleme weiterverkaufen könnt. nachdem die ausfallraten explodieren werden höhere prämien verlangt und obendrein noch bereits verkaufte hypotheken müssen tzrückgenommen werden weil z.b. die ersten raten nicht mehr betahlt werden können. in der realität sind das abschreibungen die unter dem punkt " sec. available for sale" cersteckt und anders deklariert werden. das hier ist ne massive warnung von ner bank die ne größe wie die commerzbank hat. (die aktie hat darauf nachbörslich schockierende 2% verloren....)
fitb is taking a fourth-quarter charge of $325 million, or 58 cents a share, in order to reposition its balance sheet (pre tax 500 mio$)

The company expects earnings this year to range between $2.07 and $2.09 per share. Analysts were estimating $2.68 a share.

The Cincinnati company, which has $105.8 billion in assets, says it is selling $11.5 billion in available-for-sale securities, reinvesting $2.8 billion in available-for-sale securities, reducing its wholesale borrowings by $8.7 billion and terminating $1.1 billion of repurchase and reverse repurchase agreements

on top of the "hidden" writedowns is the quality of the remaining portfolio also weakening.
zusätzlich zu den "versteckten" abschreibungen verschlechtert sich die kreditqualität weiter.
Net charge-offs, as a percentage of average loans and leases, are expected to increase to the high 40s to low 50s basis point range. (from 0,37% last quarter and 0,34 in q2 2005, over 20% increase q/q!). (10q filing)

The increase from the third quarter is largely the result of two large commercial charge-offs totaling $11 million, as well as higher consumer losses. Nonperforming assets are expected to increase in the mid- to- high single digits from third quarter levels. Fifth Third does not expect a significant change in the reserve for credit losses as a percentage of total loans and leases during the fourth quarter. (off course not. you have probably put them in the "security for sale"....)

Mortgage Banking
Fourth quarter
net mortgage banking revenues are expected to experience a low 20s percent decline relative to the same quarter last year, and a low teens percentage decline compared to third quarter. The decline in revenue is largely attributable to lower origination volumes and sales and MSR valuation adjustments

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