巴克莱-美股-银行业-银行红利：第四季度财报季度展望-2019.1.31-22页.pdf

COREEquity Research|Bank Brief31 January 2019Jason M.Goldberg,CFA+1 212 526 BCI,USCompleted:31-Jan-19,15:32 GMTReleased:31-Jan-19,15:32 GMT Guidance Grid Post 4Q18BARCLAYS CLASSIFICATION:Restricted-External Bank Brief BonusForward-Looking Statements from the 4Q18 EarningsSeasonBelow find a list of forward looking disclosures each company made in its 4Q18 earnings release,slide deck and conference call.This could assist you in your modeling,reviewing the upcoming Form 10-Ks and with management meetings you may have during thequarter.We are also attaching a file that summarizes all of this guidance into a simple 3-page grid with a print ranges set-up.NEW thisquarter we also added a page with each companys updated profitability targets.Simply click directly below my name in the upperleft corner of this e-mail.For our complete earnings review notes click the report titles below.We also included links to our updatedexcel models(click on the ticker below the review report titles).Our complete industry wrap-up(4Q18 Review&Outlook:PopJustified,More to Come Despite 1Q Headwinds,1/29/19)includes summaries of each companys results beginning on page 17.Comparing our current 2019 composite forecast(looks at the median bank under coverage)to the one we published immediatelyprior to the 4Q18 earnings season(see 2019 OUTLOOK-Past,Present&Yet to Come:Less Good Doesnt Mean Bad,Buy Banks,1/2/19),shows some changes.We expect modestly lower revenue growth(3%vs.4%)then we entering 2019,with a lower thanpreviously expected fee income base.We still expect modest balance sheet growth and net interest margin expansion allowing netinterest income growth to outpace fee income growth.Also,lower than previously expected expense growth(most banks stilltargeting positive operating leverage though aided by lack of DIF expense)and active share repurchase should still result in high-single digit EPS growth in 2019.This comes despite a 25%increase in the loan loss provision.For 2019,most banks guided to:modest loan growth(though broad-based),stable to modestly higher net interest margins(evenwithout any Fed hikes),higher fee income,positive operating leverage(aided by lack of DIF surcharge),higher loan loss provision fromhistorically low levels with only a modest increase in net charge-offs(from historically low levels),higher tax rates(though below priorexpectations),active share repurchase,and reduced capital ratios.Still,we caution,results in 1Q19 face several headwinds.They will be adversely impacted by two fewer days weighing on netinterest income(though the full impact of the mid-December Fed hike should help to offset);reduced mortgage originations;the spill-over effect of 4Q18s equity market sell-off particularly for those businesses that price on a lagged basis;and seasonally elevatedexpenses associated with the timing of compensation awards and payroll taxes.In addition,recall recent accounting changes reducedincome taxes in 1Q17 and 1Q18 when prior year equity grants were vested at stock prices higher than the price at the grant date.Unless there is a more meaningful rally in bank stock prices,we might not see a similar benefit in 1Q19.On the other hand,tradingrevenue tends to be seasonally stronger in 1Q.ALLY-4Q18 EPS Review:Initial Outlook Gives the Green Light for 2019(1/30/19)Excel model:ALLY(1/31/19)2019 Outlook:ALLY provided its initial 2019 outlook calling for:1)Adjusted EPS growth of 7-10%(from an adjusted$3.34 in 2018,implies 2019 EPS of$3.57-$3.67 vs.consensus of$3.56 or+7%);2)Core ROTCE of 12-13%+(targeted 12%+in 2018,posted 12.3%);3)net adjusted revenue up 4-6%(from$6.01bn in 2018,implies$6.25-$6.37bn vs.consensus of$6.27bn);4)adjusted efficiency ratioflat to down 100bps from 47.6%in 2018(implies stable to modestly positive operating leverage);5)adjusted retail auto NCOs low endof 1.40-1.60%compared to 1.33%in 2018.Strategic Priorities:It included a slide on strategic priorities for 2019 including:1)ongoing optimization of auto&insurance;2)sustained deposit growth&customer acquisition;3)scale in expanded digital product offerings;4)efficient capital management&disciplined risk management;5)ongoing execution along earnings growth path;6)culture of relentless focus on customers,communities,associates and shareholders.Net interest income:Core net financing revenue was up 3.0%in 4Q18 to$1.163bn or$4.6bn annualized.It continues to see annualnet interest income growing to$5bn over time.每日免费获取报告1、每日微信群内分享7+最新重磅报告；2、每日分享当日华尔街日报、金融时报；3、每周分享经济学人4、行研报告均为公开版，权利归原作者所有，起点财经仅分发做内部学习。扫一扫二维码关注公号回复：研究报告加入“起点财经”微信群。Rate sensitivity:The net financing revenue impact versus the forward curve for a gradual+100bp shift was a$51mn increase in itsmodeled scenario,up from a$3mn reduction last quarter.Auto loan yields:The retail auto loan yield was 6.39%(+17bps)in 4Q18,but since ALLY has been putting on loans above 7.00%thisquarter,it should see an increase in retail auto yields in 1Q19.Typically,the lowest seasonal yields are in 1Q and 4Q with a modestuptick in 2Q.Auto originations:Auto originations in 4Q18 totaled$8.2bn,down 10%from 4Q17 but up 1%from 3Q18.Still,2018 originationstotaled$35.4bn up 2%from 2017 and it stated it feels good about volume and quality heading into 2019.Mortgage:ALLY has been buying bulk jumbo loans as it continues to grow the held-for-investment portfolio as part of its diversificationstrategy into capital efficient assets.ALLY continues to invest in the build-out of Ally Home,its direct-to-consumer product offering.Deposits:Total deposits reached$106.2bn in 4Q18,well above its previous target to exceed$100bn in 2H18.The average rate onthe retail deposit portfolio was up 63bp y-o-y and 15bps from 3Q18 as deposit pricing remains competitive.Still,its cumulative beta isaround 35%while its expectations for medium term deposit betas remain in the 30-50%range.Debt maturities:ALLY has$1.6bn of long-term debt maturities in 2019($3.6bn matured in 2018)with a weighted average coupon of3.6%and another$2.3mn with a weighted average coupon of 6.5%maturing in 2020.It expects to use incremental deposits toreplace some of the secured debt or the securitizations.Capital:It currently feels comfortable with the 9.0%CET1 target ratio.It was 9.1%in 4Q18,though seasonally higher commercialauto balances weighed.BAC 4Q18 EPS Review:Celebrates its Sweet Sixteen with a Stock Pop(1/16/19)Excel model:BAC(1/17/19)NII:Results in 1Q19 are expected to be negatively impacted by about$200mn for two fewer interest accrual days than 4Q18.Still,itsees December rate hike and loan growth as net tailwinds.While the market may now believe that the interest rate hikes havestopped,BAC believes it can grow net interest income without rate hikes,assuming modest levels of loan and deposit growth.NIM:In 1Q19 BAC expects its net interest margin to edge up a little bit driven by loan growth,funded by low-cost deposits.Longerterm,NIM is going to depend on the forward curve and BACs ability to lag deposit rate paid.Rate sensitivity:A+100bps parallel shift in the interest rate yield curve is estimated to benefit NII by$2.7bn(down from+$2.9bn at3Q18)over the next 12 months,driven primarily by sensitivity to short-end interest rates(short end represents approximately 75%ofthis sensitivity).1Q19 Expenses:Typically 1Q expenses seasonally increase compared to 4Q.In addition to any increase related to seasonal revenuein 1Q(trading,etc.),BAC anticipates the 1Q19 expense will be higher than 4Q18 by approximately$500mn due to seasonal personnelcosts,mostly payroll tax.BAC expects expenses to trend lower from the 1Q19 level through the remaining quarters of 2019.2019 Expenses:As it looks ahead to 2019,BAC believes its full year expenses should approximate the 2018 expense level(reportedexpenses were$53.4bn in 2018).This expense level includes approximately$1bn for increased spending in the aggregate in severalareas:typical yearly merit increases,health care benefits,primarily from inflation,marketing and the previously announced newinvestment initiative spending in technology as well as expansion and modernization of its financial centers.On a full year basis,BACshould be able to offset these investments with lower FDIC insurance costs and other efficiencies.NCOs:BAC expects NCOs to remain around$1bn range on a quarterly basis through 2019,and it would expect provision to roughlymatch NCOs,depending on loan growth.Debt issuance:BAC is comfortably in compliance with TLAC rules.It expects parent debt issuance in 2019 to be less than itscorresponding maturities.Tax rate:For 2019,BAC expects its effective tax rate to be 19%ex.unusual items.On an operating basis,we believe itapproximated this level in 2018.Capital return:BAC expects to at the minimum sustain its current payout ratio in CCAR 2019(was above 100%at time of CCAR 2018submission,now closer to 95%).BK-4Q18 EPS Review:Pointing to Reasonable EPS Growth in 2019(1/16/19)Excel model:BK(1/27/19)EPS Growth:BK expects reasonable EPS growth in 2019(ex.notable items)Fee Income:BK noted that Investment Management fee revenue for 1Q19 is expected to be impacted by lower market levels andoutflows from 4Q18.NII:Based on current assumptions,BK expects 1Q19 net interest income to be flat to up compared to 4Q18.These assumptionsinclude interest-bearing deposits remaining stable q-o-q and improvement in yield in its loan and securities portfolio q-o-q.Deposits:QTD,interest-bearing deposits are relatively flat compared to 4Q18.In addition,BK expects the noninterest-bearingdeposits to continue to tick down as interest rates increase.BKs incremental deposit beta is currently 82%across all currencies.Still,when looking at core U.S.interest-bearing deposits(ex.wholesale funding),its deposit beta has moved from the mid-80%range tonear 100%.Pershing:BK expects Pershing to return to revenue growth in the near future.After 1Q19,Pershing will have overlapped the impact oflosing two larger clients,which has been a drag on y-o-y growth rates.In addition,BK continues have a sizable pipeline of newbusiness that it is currently on boarding,but will start to go live in 2H19 and have a more meaningful impact in 2020.Corporate Trust:BK continues to see improved results in its core Corporate Trust business,resulting from repositioning of its frontoffice sales/relationship management teams.In addition,its investment in improving technology capabilities has aided growth.BKcontinues to see a strong pipeline,particularly for collateralized loan obligations and insurance-linked securitiesTreasury Services:BK continues to see moderate growth in Treasury Services.Its focus of growing liability balances from its TreasuryServices clients has been paying off as BK has experienced growth in attracting competitively priced interest-bearing client deposits tosupport client payment activities.Collateral Management:In 4Q18,BK saw strong revenue growth from its traditional clients and newly converted government clearingbroker-dealer clients.In addition,it benefited from higher clearance volumes related to record issuance levels and strong demand forU.S.government treasury issuance.BK believes its Clearance and Collateral Management capabilities are among the best in theindustry and its collateral optimization/segregation services go beyond what competitors can provide.As collateral managementbecomes increasingly more important part of the investment process,BK expects to be a major beneficiary.Securities Portfolio:The yield on its securities portfolio should continue to move higher throughout 2019 as it benefits from highershort-term and reinvestment rates.Its securities portfolio has a 2 year duration,with 30%repricing each quarter.Expenses:BK does not expect its 2019 expense base to be significantly higher than 2018(ex.notable items).During 4Q18,BKreduced management layers,which resulted in a severance charge that is expected to have a payback less than 1 year.These savingsand other efficiencies should allow BK to increase its investment in technology and infrastructure without significantly increasing itsexpense base.BK sees meaningful opportunities to become more efficient across the company as it looks to automate many manualtasks.Recall,BK increased its total tech-spend to$2.7bn in 2018,up from$2.4bn in 2017(it expects it to be higher again in 2019).This tech/investment spend continues to be focused on enhancing its operating platform and expanding its capabilities to supportorganic growth.1Q19 Expenses:1Q expenses are seasonally higher due to the acceleration of long-term incentive compensation for retirement-eligible employees(it expects the impact to staff expense to be similar to 2018).Excluding notable items,BK expects 1Q19 expenses tobe up 1-2%y-o-y and q-o-q.Tax Rate:BK expects its 2019 effective tax rate to be 21%.PG&E:BK has$160mn said it has exposure to California utility company,which may file for bankruptcy(we believe to be PG&E).Reflecting this,BK increased its provision during the quarter and could have additional provisioning depending how the circumstancedevelops.BBT 4Q18 EPS Review:Shifting Focus to Disrupt to Thrive(1/17/19)Excel model:BBT(1/18/19)2019 Outlook(matches its November 2018 Investor Day guidance):1)Loans:up 2-4%;2)NCOs:0.30%-0.50%;3)Revenues:up2-4%;4)Expenses:flat(vs.$6.8bn base);and 5)Tax rate:20-21%.Its 2019 Outlook is forecast off a relatively flat curve(no rateincreases).1Q19 Outlook:1)Loans:up 1-3%annualized;2)NCOs:0.35-0.45%(0.38%in 4Q18);3)GAAP NIM:relatively flat with 4Q18(3.49%in 4Q18);4)Core NIM:up slightly from 4Q18(3.40%in 4Q18);5)Fee income:up 3-5%y-o-y;6)Expenses:up 1-3%y-o-y;7)Tax rate:20-21%;and 8)Buybacks:Plans to repurchase$425mn in shares in 1Q19(up from$375mn in 4Q18 and$200m in3Q18).“Disrupt or Die”rebranded“Disrupt to Thrive”.BBT is looking to make substantial progress on its strategic initiatives.It is investinga large amount of savings from process improvement into its digital platform and other forms of technological.Investments that allow itinnovate for the future(60-70%of saves are being reinvested into business and 30%to 40%falling to the bottom line).NIM:Going forward,it still sees some burn out of reported GAAP margin(from the incremental decline in purchase accountingaccretion),but thinks it can keep core NIM relatively flat to up little bit.Share repurchases:At its November 2018 Investor Day,BBT talked about reducing its CET1 ratio from 10.2%to 9.50-9.75%,subjectto the Fed easing LCR requirements.It expects this to be reflected in CCAR 2019.Restructuring charges:Of its$76mn restructuring charge in 4Q18,roughly 2/3 was severance costs related to BBTs expanding layersinitiatives that it started in 4Q18,and the other 1/3 was in real estate.While it booked$150mn in merger and restructuring charges in2018,it expects to book another$75-100mn in 2019,more focused around real estate write-downs as BBT continues to close moreretail branches,and consolidate office space.Revenue growth:The key drivers behind its 2019 revenue