Citigroup Vs. Bank Of America
Fecha Martes, julio 15 @ 11:57:37
Tema Banca y Finanzas:: Finances & Big Blue
| It's only fitting that both New York-based Citigroup and Bank of America, two of the three largest financial firms (by market value) in the U.S., report second-quarter earnings within hours of each other this morning. Both stand as leaders for their business models.
Emulating Citigroup, J.P. Morgan Chase (nyse: JPM - news ->people ) has the assets but hasn't yet dared venture into insurance products. Morgan Stanley (nyse: MWD - news ->people ) has investment banking, brokerage and consumer finance but hasn't yet jumped wholesale into retail banking. HSBC Holdings (nyse: HBC - news ->people ) is also tilting at Citigroup's franchise in the U.S. with its recent purchase of Household. Gunning for Charlotte, N.C.-based Bank of America are BankOne (nyse: ONE - news ->people ), Wells Fargo (nyse: WFC - news ->people ) and Wachovia (nyse: WB - news ->people ), all consumer and commercial banking giants as a result of their own recent mega-mergers. San Francisco-based Wells Fargo has been the most active recently in expanding its retail franchise with the announced purchase of Pacific Northwest Bancorp (nyse: PNWB - news ->people ). Behind the three are Fleet (nyse: FBF - news ->people ) and U.S. Bancorp (nyse: USB - news ->people ), which both tried unsuccessfully to integrate investment banking into their business.
Fleet has since shuttered its investment banking unit, and U.S. Bancorp is in the process of spinning off Piper Jaffray. So how do the two, Citigroup and Bank of America, stack up against each other? Citi is far ahead in most major metrics, but Bank of America holds more cash and has a higher-paying and higher-yielding dividend--now $3.20, or 3.91% annually, compared with $0.80, or 1.74%, for Citigroup. Bank of America shareholders can thank the big dividend for an 82% total return since its merger, still small compared with 217% for Citigroup.
Size up the companies, their numbers and their prospects, and tell us who you think wins today's Monday Matchup.
Citigroup (nyse: C - news ->people )
Formation: Oct. 8, 1998, merger of Travelers and Citicorp.
Product Offering: Consumer and commercial banking and lending, investment banking, investment advisory, insurance and even clearing services.
Focus: Since the merger, Citigroup has grown its consumer finance business through the acquisition of Associates First Capital, added to its international banking with the purchase of Banamex and trimmed its insurance offerings by sloughing off Travelers Property/Casualty (nyse: TAPa - news ->people ).
Market Cap: $232.3 billion.
Sales: $72 billion.
Assets: $1.14 trillion.
Profits for 12 months ended March 31: $14.5 billion.
Cash: $19.7 billion.
Chief Executive, 2002 Total Compensation: Sanford Weill, $18.3 million.
Bank of America (nyse: BAC - news ->people )
Formation: Sept. 30, 1998, merger of BankAmerica and NationsBank.
Product Offering: Consumer and commercial banking.
Focus: It's no secret that Bank of America is looking to grow its investment banking operations and, like Citigroup, has its sights set on Mexico, making a $1.6 billion investment in Grupo Financiero Santander Serfin for 24.9% of the company.
Market Cap: $121.8 billion.
Sales: $34.8 billion.
Assets: $680 billion.
Profits for 12 months ended March 31: $9.5 billion.
Cash: $25.1 billion.
Chief Executive, 2002 Total Compensation: Kenneth Lewis, $9.6 million.
Forbes
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