Stocks of the largest U.S. banks probably won’t outperform the broader market in 2014 after many climbed more than 30 percent this year, said Christopher Mutascio, an analyst at Stifel Financial Corp.’s KBW unit.
Bank of America Corp., the biggest U.S. lender by assets, was downgraded to “market perform” from “outperform” by KBW Inc. because of costs tied to repurchasing faulty mortgages and new rules on debit-card fees.
Bank of America Corp.’s $33 billion of asset sales last year, designed to help meet international capital standards, may slice at least $2.8 billion from 2012 profit that the firm also needs to reach its target.
Bank of America Corp., the biggest U.S. debit-card issuer, may face pressure to scrap plans to impose a monthly fee on some card users after its largest competitors abandoned the strategy amid a consumer rebellion.
Bank of America Corp., the worst performer in the Dow Jones Industrial Average last year, had profit estimates cut by analysts at Citigroup Inc. and KBW Inc. this week on higher projected losses for soured mortgages.
Citadel LLC and Lansdowne Partners Ltd. boosted stakes in Regions Financial Corp. in the second quarter, mimicking earlier bets by hedge fund Paulson & Co., before the bank led this month’s rout in U.S. financial stocks.
Bank of America Corp.’s surging claims for refunds on faulty mortgages in the second quarter stemmed partly from loans made by the bank and its Merrill Lynch unit, in addition to the company’s Countrywide subsidiary, said two people with direct knowledge of the matter.