Financials Weekly Notes: U.S. Bancorp & Deutsche Bank

USB: U.S. Bank logo
U.S. Bank

In a week marked by considerable volatility in the stock market, bank shares continued the fall they began late last week on Monday and Tuesday, before more than making up for the decline over the rest of the week. Investor sentiment was stretched early in the week from a series of worse-than-expected reports about the economy. An increase in Spain’s bond yields also led to significant unrest. But as Spain’s economy began to slowly cool down and the earnings season was kicked off by positive earnings surprises, investors flocked the market again. While the prices of bank stocks were primarily driven by macro-economic factors, there were notable events to report for U.S. Bancorp (NYSE:USB)  and Deutsche Bank (NYSE:DB) over the week.

U.S. Bancorp

U.S. Bancorp has decided to do away with its private student loan offerings to do away with the high default rates associated with these loans and the proposed increased federal oversight on these loans. Student loans constitute just about 2% of U.S. Bancorp’s total loan portfolio, amounting to around $4.7 billion at the end of 2011.

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The bank has also been steadily growing its wholesale banking division in order to provide its clients with services and products which it ceased to offer since 2003 when it spun off Piper Jaffray (NYSE:PJC).

Details about U.S. Bancorp’s plans for the future and their impact on its valuation can be found in our article U.S. Bancorp Expands Wholesale Business; Stops Student Loans.

See our full analysis for U.S. Bancorp

Deutsche Bank

Deutsche Bank (NYSE:DB), besides its competitors Barclays (NYSE:BCS), Goldman Sachs (NYSE:GS) and Credit Suisse (NYSE:CS) are preparing bids to acquire the Maiden Lane III portfolio from the Federal Reserve Bank of New York. The complete Maiden Lane III portfolio has a face value of $47.7 billion, with a market value of about $17.8 billion as of December 2011. The bid would be for a chunk valued around $7.49 billion. More information about this can be found in our article, Banks Queue Up Bids For Maiden Lane III.

See our full analysis for Deutsche Bank

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