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Financial Sector Review – Net Income & Dividends

Wed, 04/29/2009 - 2:00am
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Category: Stock Insights
Related: AIG, BAC, C, FNM, FRE, LEH, S&P 500

We recently reviewed Net Income (ex. Special Items) & Common Dividends for a list of 86 financial institutions in the S&P500 and made the following observations:

  • The market value of equity has been reduced by ~ 65% since 2006 (from $2.66T on 12/29/08 to $945B on 4/24/09).
  • The Financial Sector lost $173B (Net Income to Common ex. SI) in 2008 ($251B loss if Special Items are considered).
  • Over 50% of the firms (44) have lowered dividends in 2009.
  • The Financial Sector lowered Common Dividends by 68% or $41.4B ($19.9B in 2009 vs. $61.4B in 2008).
  • 20 out of 86 firms posted Net Income (ex. SI) losses in 2008, which totaled $239B.
  • 66 out of 86 firms posted Net Income (ex. SI) gains in 2008, which totaled $65.7B.
  • Analysts are projecting $69.6B in Net Income for 2009 of which $64.1B is coming from firms that did not post Net Income losses in 2008.

 

Exhibit 1:

Notes:

1)FNM, FRE, and LEH are not currently part of the S&P500 but were added back for the analysis.
2)FNM, AIG, FRE, C, BAC, LEH accounted for $225B in NI ex. SI (-$59B, -$52B, $51B, -$32B, -$23B,-$7B)
3)AIG had and additional $47B in Special Item Losses
4)JPM made the most Income in the Financial Sector in 2008, $3.64B from $15.3B in 2007. They are projected to earn just over $6B in 2009 and $11B in 2010.
 
 
Exhibit 2:
 
 
Exhibit 3:
 
 
 
Exhibit 4:
 
Note: AIG, FNM, FRE, have no forecasts


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