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Bank of America Report Sees Worse Mortgage Defaults Boyd & Edwards, Bloomberg 6-22 Losses in the U.S. mortgage market may be the ``tip of the iceberg'' as borrowers fail to keep up with rising payments on billions worth of adjustable-rate loans in coming months, Bank of America Corp. analysts said. Homeowners with about $515 billion on adjustable-rate home loans will pay more this year, and another $680 billion worth of mortgages will reset next year, analysts led by Robert Lacoursiere wrote in a research note today. More than 70 percent of the total was granted to subprime borrowers, people with the riskiest credit records, they said. Homeowners who can't afford to pay higher interest rates may struggle to sell their properties as home price increases slow, and stricter lending standards will make it harder to refinance, the Bank of America analysts wrote. The proportion of income that U.S. households with mortgages used for making payments in the first quarter of 2007 was close to or above the previous high in the late 1980s and early 1990s, the analysts said. SunTrust Banks to sell 425 branches, 48 buildings 6-15 SunTrust Banks said Friday that it will sell 425 retail branches and 48 office buildings, including the building at 3620 Six Forks Road in Raleigh, and lease them back. The move is part of an effort to cut costs and improve efficiency at the bank, one of the Triangle market's heaviest hitters. It will have "essentially no visible impact on clients or most employees," according to a prepared statement by Vice Chairman William Reed. The company is not closing any branches. In a Pilot Project in Boston, Citi Tries to Get Its Pieces to Fit Robin Sidel, WSJ 6-06-07 Even as Citigroup moves more of its business overseas, executives of the big bank -- under pressure to expand without major acquisitions -- are betting on Boston in an attempt to boost revenue. The city is the site of a pilot program aimed at generating domestic growth by using the bank's retail branches to attract customers who can then tap into the bank's other services -- from corporate cash-management programs to personal-financial advice. At the same time, bankers who advise the city's wealthy clients are being prodded to coordinate with their colleagues in New York and around the world to offer sophisticated financing services that might not be available from local banks. That new thinking was demonstrated on the morning after Valentine's Day, when two dozen Citigroup bankers sat in a conference room at the Millennium Bostonian Hotel surrounded by color-coded, laminated place mats that identified them and described their jobs. Although they worked only blocks apart, most didn't know one another. Although Boston represents a tiny part of Citigroup's sprawling empire that last year generated $21.54 billion in profit and $89.6 billion of revenue, there is a lot riding on the city for Charles Prince, the veteran Citigroup lawyer who now holds the positions of chief executive and chairman. It has been nearly a decade since Sanford Weill assembled Citigroup by acquiring a string of financial-services companies, but the bank is still struggling to put the pieces together. Mr. Prince is trying to put the bank's parts together just as some investors, frustrated by the bank's lethargic stock price, bloated cost structure and disappointing financial results, have called on the company to break it apart. Last month, hedge-fund manager and activist investor Edward Lampert disclosed that he had bought more than 15 million shares of Citigroup, prompting speculation that he, too, will ratchet up pressure on Mr. Prince. In Boston, Citigroup is overhauling operations and corporate culture in a city where computers don't talk to each other and bankers who have spent years coddling wealthy clients can be reluctant to share them with colleagues. Last fall, Citigroup opened its first retail branches in the city, joining the bank's force of Smith Barney brokers who have been there for some 50 years. A financial adviser from Citigroup's Smith Barney brokerage unit now sits in each retail branch in Boston. Elsewhere, financial advisers are teaming up with colleagues in other parts of the bank's sprawling network to pitch more products to clients. Ms. Greenwood, who is overseeing the effort, provides updates to Mr. Prince every few days. Later this month, for the first time, customers who have a Citibank checking account in Boston and a Smith Barney brokerage account will be able to see all of their account information on the same statement. The notion is simple and is being pursued by banks around the country. Once known simply as cross-selling, in which branch bankers hawked credit cards and mortgages to checking-account customers, banks are now trying to boost results by overhauling technology and establishing formal programs that provide financial incentives to bankers who work together. "It sounds like the easy no-brainer and it's always on everybody's to-do list, but you need management and capital commitment," says Craig Pfeiffer, director of marketing and business development at Smith Barney. J.P. Morgan Chase & Co. recently assigned a team of corporate bankers to develop comprehensive plans for corporate clients that stretch across different parts of the bank. "Too many people were selling their own products without feeling accountable for J.P. Morgan Chase's overall relationship with the client," CEO James Dimon wrote in his annual letter to shareholders. Bank of America Corp., meanwhile, recently upgraded technology so that personal bankers and brokers can get access to the same file on a client, leaving notes for one another about that customer's potential financial needs. And Wachovia Corp. last week made a move to expand its financial-services offerings with a deal to acquire A.G. Edwards. The key for the banks, of course, is to see if the efforts can result in new revenue that is meaningful to the bottom line. If Citigroup's effort in Boston succeeds, the bank hopes to roll out similar programs in offices around the country. Still, that is likely to take years and will be difficult in cities where the bank already has beachheads in key businesses where the corporate culture historically has kept bankers apart. Also, Citigroup is still a bit player in Boston, with a handful of branches in the city and an anticipated 30 branches in the Boston area by the end of the year. Bank of America, by comparison, has 26 branches in Boston alone and more than 200 in the area. For now, Citigroup is relying on bankers like Peter Princi to spread the gospel. The former minor-league baseball player, who is one of Citigroup's top-producing brokers in Boston, grilled one of his New York colleagues on the phone before agreeing to introduce him to one of Mr. Princi's wealthy longtime clients. After two weeks of phone calls, Mr. Princi took Joseph Curran, a commercial banker, to meet his client, an executive at a real-estate company. Last month, Messrs. Princi and Curran took the client to a Yankees-Red Sox game in New York. The customer is now pursuing a commercial loan and credit-default swaps with the bank. Ratings Changes On 5-18 Punk, Ziegel & Co Downgraded BK from Buy to Market Perform. Home Page Factoids Previous Update |