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2. JPMorgan confronts Bloomberg

When Bank of America (NYSE: BAC) released earnings for the first quarter of 2013 last month, it counted as a downside surprise, as the bank reported a fully diluted $0.20 per share vs. expectations of about $0.23 per share.

But if you look at earnings growth, the bank fared quite well. In fact, of the biggest 25 banks, Bank of America reported the largest quarter-over-quarter as well as year-over-year EPS growth, according to an analysis by SNL. The $0.20 a share was nearly seven times the $0.03 in the first quarter of 2012.

Notably, Bank of America managed to boost its net interest margins quarter-over-quarter. As I noted earlier, net interest margin was 2.43 percent in the first quarter of 2013, compared to 2.35 percent in the fourth quarter of 2012. A year ago, the NIM was 2.51.

SNL's analysis found that only three of the top 25 companies reported an increased net interest margin over the prior quarter. These included Bank of America, Capital One, and First Niagara Financial Group. The median decline was 10 basis points. You would have to think that it will be hard to pull this off with any consistency.

As for other banks, Zions turned in the second strongest year-over-year percentage EPS growth among large banks. EPS rose from $0.14 a year ago to $0.48 in the first quarter of 2013.

Citigroup's earnings also grew strongly compared to the other big banks, with EPS of $1.23 reported in the first quarter compared to $0.38 in the linked quarter and $0.95 in the year-ago quarter.

For more:
- here's the report

Read more about: Bank of America, bank earnings
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By Jim Kim

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3. Jamie Dimon may be on his way to big win

A cynic might argue that JPMorgan's foray into the great controversy over the Bloomberg snooping is an attempt to deflect attention away from its shareholder annual meeting woes, where the media narrative hasn't been great. Just about every article includes a listing of all the bank's woes, especially the regulatory and enforcement woes, suggesting that Jamie Dimon might be forced to give up the Chairman title.

In contrast, by letting it be known that the bank is confronting Bloomberg about reporter snooping via terminals allows for a more positive portrayal of the bank, a picture of an outraged bank defending its privacy rights and taking on a media giant.

That explanation is perhaps too cynical. The reality is that the still influential bank has plenty to be legitimately angry about. Many are likely applauding the bank's demand that that Bloomberg hand over five years' worth of employee data access logs. The bank is also making clear that it is pondering legal action.

JPMorgan has every right to know which Bloomberg employees accessed data on how the bank's staff used its terminals, according to the Financial Times.

The bank also asked for some sort of verification that Bloomberg had indeed revoked reporters' access to information about bank employee use terminals.

"People at JPMorgan suspect Bloomberg reporters used login information to try to determine whether Bruno Iksil, the London-based derivatives trader known as the 'London Whale,' had left the bank."

Bloomberg, to its credit, is making the right moves, reaching out directly to top executives at client firms, assuring them that the company gets the importance of the move. At this point, the effect on revenue will likely be nil. Wall Street is wholly hooked on the terminals. Longer-term, however, companies may try to reduce their dependence with customized services provided by others or developed in house.

For more:
- here's the article

Read more about: JPMorgan Chase, Bloomberg Terminals
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By Jim Kim

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4. Dimon turns to Blankfein for support, advice

The annual shareholder meeting voting has already begun on the ballot resolutions at JPMorgan Chase. The Financial Times reports that Chairman and CEO Jamie Dimon seems to be faring well, especially given all the media attention afforded to supporters of separating the two positions.

"Large shareholders and other people familiar with early voting patterns said an investor proposal to strip Mr. Dimon, the chief executive, of his dual role as chairman was on track to gather less than 50 per cent of the vote. However, some large investors who are backing Mr. Dimon are voting against the re-election of other board members, leaving in doubt the position of directors such as Ellen Futter, a lightning rod for corporate governance activists, whose qualifications to serve on the board's risk committee have been questioned. Investors can vote or change an existing vote at any point up to the annual meeting in Tampa, Florida, next Tuesday, and the final tally could change."

It should be noted that some of largest shareholders have yet to vote. So what's going on?

The paper says that, "One shareholder adviser said JPMorgan management had 'picked their battles' in rallying around Mr. Dimon, and 'the almost unprecedented lobbying effort' could produce a win for the bank on that proposal while incurring a significant vote against one or more directors."

That rings true. The issue here is determining the threshold level at which the board will decide to replace a director. If a director fails to win, say, 80 percent of the vote, will that trigger a move to replace him or her? You get the feeling that some directors are vulnerable.

It could be disastrous for the board not to replace directors who fail to garner widespread support. So far the board has put up a united front in support of the embattled risk policy and audit committees. There may be some interesting discussions underway behind the scenes.

For more:
- here's the article

Read more about: Jamie Dimon, CEO
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By Jim Kim

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5. Goldman Sachs slashes proprietary stakes

Running a premiere bank puts one in rare air, and it's not surprising that Jamie Dimon, CEO of JPMorgan Chase, and Lloyd Blankfein, CEO of Goldman Sachs, are friends. They have a lot in common, as both have been put through the regulatory wringer and have been severely tried in the court of public opinion.

As the worm turns in this industry, Dimon is now the one who finds himself embattled and attacked from all sides, while Blankfein is enjoying a respite after a tumultuous period. Indeed, while Dimon fights for his dual job as Chairman and CEO, Blankfein has taken a statesman-like turn and perhaps has put himself in position to gracefully transition to the perfect public service job.

The New York Times reports that Blankfein has in fact become an informal advisor to his friend Dimon.

It noted that, "Having survived that trial by fire, Mr. Blankfein is advising Mr. Dimon that the current storm will eventually pass, just as it appears to have done so for Goldman, the people with knowledge of the relationship said. Goldman's experiences does offer lessons. At a recent meeting of top financial services industry executives, Mr. Dimon asked a small group of people, which included a top-ranking Goldman executive but not Mr. Blankfein, how Goldman managed to avoid having to put forward to shareholders a vote on whether to split the job of chairman and chief executive, according to one attendee and others briefed on the conversation."

It's clear to many that Goldman Sachs has done a better job negotiating with key shareholders ahead of its meeting, offering governance changes to secure approval. There is still time for JPMorgan to do the same, but the board has to offer something real.

For more:
- here's the item

Read more about: Goldman Sachs, Lloyd Blankfein
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By Jim Kim

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