Bank shares largely remained flat over this week, with news from the troubled European region doing little to support the bulls or the bears in either direction. Prices corrected slightly towards the beginning of the week to make up for the significant rally seen in prices last Friday week (see BoA Leads Market Rally on Economic Data, Improved Sentiment). But besides that, this has been one of those rare, largely uneventful weeks for the banking sector. No doubt, a few individual banks did see some action. The two largest Swiss banks, UBS (NYSE:UBS) and Credit Suisse (NYSE:CS), came out with their poor earnings figures this week which led to small decline in their shares. There were also significant events to report for JPMorgan (NYSE:JPM) and Goldman Sachs (NYSE:GS).
UBS & Credit Suisse
UBS made its performance results for the last quarter of 2011 public this Tuesday, and Credit Suisse reported its numbers on Thursday. Both banks reported a significant drop in their income numbers for the period, with their investment banking operations taking a hit. In fact, Credit Suisse reported its first quarterly loss in 3 years due to a series of loss-making sell-offs of investment bank assets in a bid to quickly reach strict capital requirements.
But their results reinforce the strength of their corner-stone wealth management business, which held up well for the period and reversed the poor performance in Q3 2011.
JPMorgan reached an agreement over its overdraft fees related lawsuit, and will pay $110 million to customers it wrongly charged these fees for years. The largest U.S. bank in terms of assets was let off the hook quite easily, considering the fact that competitor Bank of America (NYSE:BAC) shelled out $410 million for a similar settlement last year. The settlement requires an approval from U.S. District Judge James Lawrence King.
More information about this can be found in our article, JPMorgan Gets a Bargain in Overdraft Settlement Deal.
Goldman Sachs seems to be eying a larger piece of the Indian mutual fund market, as the global investment bank is in talks with rival Fidelity to buyout the latter’s India mutual fund business valued at around ₹10 billion ($200 million). Goldman became one of 44 Indian mutual fund providers last year with its acquisition of Benchmark Asset Management, and already manages around $700 million in mutual fund assets in the country. The assets under management size would reach $2.5 billion if the deal with Fidelity goes through in coming months.
To read more about this, check out our article Goldman Eyes Fidelity’s India Mutual Fund .