Financial Sector Weekly Updates (AIG, BAC, COF, NDAQ, V)

by Trefis Team
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Below we present a summary of key updates that might be of interest to investors interested in financial stocks. We look at positive credit ratings for AIG (NYSE:AIG) by Morningstar, Bank of America‘s (NYSE:BAC) declining charge-offs, acquisitions by Capital One (NYSE:COF) and Visa (NYSE:V) and Nasdaq (NASDAQ:NDAQ) bidding for LCH Clearnet.

AIG

Bank of America Merrill Lynch initiated coverage of AIG with a Buy rating. Bank of America’s 12-month price objective for AIG is $37. [1]

Morningstar also initiated credit coverage of AIG with a BBB rating reflecting company’s weak core operating brands, somewhat counteracted by a stabilized balance sheet after recapitalization from the U.S. [2]

Aircraft leasing arm of AIG, ILFC, has announced that it has entered into 114 lease commitments so far in 2011 and has also ordered 100 Airbus 320 aircraft and 33 Boeing 737. [3]

Bank of America

The company reported a decline in its credit card default rates in the month of May to 8.03% from 8.25% in the previous month. Bank of America’s charge-off rates remain highest among the top six card issuers in the US. [4]

Capital One

Capital One Bank announced a $9 billion deal to acquire the online bank ING Direct USA to become the fifth largest US bank by deposits from being the eighth largest bank. [5]

Capital One is has also made an early bid for HSBC’s US credit card business. The two deal will allow Capital One to expand lending as well as secure funding. [6]

Nasdaq OMX

Nasdaq is bidding for a minority stake at LCH Clearnet as the company sees opportunity for a horizontal clearing house in Europe. [7]

Visa

Visa announced that it has agreed to acquire Fundamo, which will help it provide the next generation of of mobile payments options. [8]

Notes:
  1. UPDATE: Bank of America Merrill Lynch Initiates AIG at Buy, Benzinga, June 10, 2011 []
  2. Credit Rating Initiation: AIG, Morningstar, June 15, 2011 []
  3. ILFC Announces 114 Aircraft Leases, Marketwatch, June 16, 2011 []
  4. Bank of America May card defaults resume decline, Bloomberg Businessweek, June 15, 2011 []
  5. Capital One Bank to acquire ING Direct USA, Washington Post, June 17, 2011 []
  6. Capital One Bids for HSBC’s U.S. Card Business, WSJ, June 15, 2011 []
  7. Nasdaq Confirms LCH.Clearnet Bid, WSJ, June 17, 2011 []
  8. Visa Furthers Mobile Banking Push by Acquiring Fundamo, Trefis []
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