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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.

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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]

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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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