I gave myriad reasons in Bailout Nation 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, 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
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Source:
Six Giant Banks Made $51 Billion Last Year; The Other 980 Lost Money
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
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