The Big Picture » Six Banks Made $51 Billion in ’09 (The rest lost money)

Six Banks Made $51 Billion in ’09 (The rest lost money)

Posted By Barry Ritholtz On June 5, 2010 @ 12:00 pm In Bailout Nation,Bailouts,Credit | Comments Disabled

I gave myriad reasons in Bailout Nation ^[1] for being strongly opposed to bank bailouts. One of the most compelling factors was the horrific impact past bailouts have had on other competitors in the sector. Bailouts rewarded the worst managements, the least deserving shareholders, and the most reckless creditors. (That’s not how capitalism is supposed to work).

As it turns out, the banking sector is no different than these other industries that have been bailed out. After the government’s largesse, bad companies do well — and at the expense of the well managed, responsible, non-reckless firms.

Forbe’s Bob Lenzner shows us exactly how warped the bailed out banking sector has become: Bob notes that Six giant banks made $51 billion in profits last year ^[2], while the rest of the banking industry — the other 980 banking institutions — all lost money.

That is simply astonishing.

As the table below shows, the other 980 that lost money (in the aggregate) — thats a heckuva data point.

Trading Revenue at U.S. Bank Holding Companies in 2009

All data from December 2009 FR Y-9C filings. Dollar amounts in millions.

		Total Assets, Dec. 31, 2009	Trading Revenue	Pretax Income	As a Percentage of Pretax Income
1	Goldman Sachs Group	$849,278	$23,234	$19,451	119.4%
2	Bank of America	2,224,539	12,067	4,592	262.8%
3	JPMorgan Chase	2,031,989	9,870	16,149	61.1%
4	Morgan Stanley	771,462	7,279	857	849.4%
5	Citigroup	1,856,646	4,448	(7,799)	N/R
6	Wells Fargo	1,243,646	2,674	17,998	14.9%
	Top 6 Aggregate		59,572	51,248	116.2%
7	Bank of New York Mellon	212,336	1,032	2,626 *	39.3%
8	State Street	156,756	598	2,527	23.7%
9	Northern Trust	82,142	508	1,255	40.5%
	Trust and Custody Banks Aggregate		2,139	6,408	33.4%
10	MetLife	539,314	361	(2,798)	N/R
11	GMAC	172,313	173	(7,939)	N/R
			534	(10,737)	N/R
12	PNC Financial Services Group	269,922	170	3,324	5.1%
13	U.S. Bancorp	281,176	163	2,632	6.2%
14	Fifth Third Bancorp	113,380	125	767	16.3%
15	Sun Trust Banks	174,166	100	(2,450)	N/R
	Banks Nos. 12 to 15 Aggregate		558	4,273	13.1%
	Remaining 971 Bank Holding Companies Aggregate		1,399	(19,284)	N/R
	All Bank Holding Companies (986 banks) Aggregate		64,202	31,908	201%

* Excludes $4.8B in securities losses related to restructuring of Bank of New York Mellon’s investment securities portfolio in Q3 2009. “N/R” = Not relevant.
Table and data courtesy of Forbes.com ^[2]

Source:
Six Giant Banks Made $51 Billion Last Year; The Other 980 Lost Money ^[2]
Robert Lenzner
Forbes, 06.03.10, 04:25 PM EDT
http://www.forbes.com/2010/06/03/goldman-sachs-citigroup-markets-lenzner-morgan-stanley_2.html

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2010/06/six-banks-made-51-billion-in-09-the-rest-lost-money/

URLs in this post:

[1] Bailout Nation: http://www.amazon.com/exec/obidos/ASIN/0470520388/thebigpictu09-20

[2] Six giant banks made $51 billion in profits last year: http://www.forbes.com/2010/06/03/goldman-sachs-citigroup-markets-lenzner-morgan-stanley_2.html

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