Three of the biggest bailed-out banks - Bank of America, Chase, and Citigroup - reported good news this week.
After suffering through months of plummeting profits, the three behemoths' chief executives all said their banks were in the black this year.
And their stock, which had plunged over the last year, jumped higher over the last four days, with Chase rising 45.6% from Monday's opening to Thursday's close, Citi rising 62% and Bank of America 86%.
Kenneth D. Lewis, chief executive of Bank of America, noted that the bank was profitable in January and February and that he expects revenue to top $100 billion this year in remarks he made after a speech in Boston on Thursday.
"That kind of cash flow can solve a lot of problems, given time and an improving US economy," said Lewis.
Lewis also said the bank is in a "hurry" to return capital and guarantees from the government's rescue program.
According to Bloomberg News:
"We have been profitable for the first two months of the year," Lewis told reporters after a speech to the Boston College Chief Executives' Club in Boston today. "We expect to be profitable" in 2009. In his speech, Lewis said the bank may earn $50 billion this year, measured before taxes and provisions, and the company won't need more federal aid.
Lewis also expressed his opposition to a formal government takeover of the largest global banks, reports Bloomberg News:
"The announcement of nationalization would immediately undermine confidence in the financial system even further and send shudders through the investment community," he said. "By nationalization, I mean a full-scale takeover of an institution by the government in which common shareholders, and possibly debt holders as well, would be wiped out. This, in my view, would be a nightmare."
Also on Thursday, Citigroup Chairman Richard Parsons told Reuters that the bank does not need any more capital injections from the government and expressed confidence that Citi would remain in private hands.
Asked whether the bank needed more government assistance, he replied:
"No, I think actually, particularly with the latest conversion... Citi is actually one of the better capitalized banks in the world.''
And on Monday night, Citi CEO Vikram Pandit sent out an internal memo stating that the bank was profitable in January and February of 2009 and "that the bank's key capital ratios were strong," reports the New York Times.
In the memo obtained by the Times, Pandit writes:
In addition to our strong capital position, I am most encouraged with the strength of our business so far in 2009. In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007. In January and February alone, our revenues excluding externally disclosed marks were $19 billion. Our client businesses are strong: our deposits are relatively stable, our client-driven Securities and Banking businesses have been performing well, including our recent #1 rank in M&A, and we continue to provide credit to consumer and corporate customers. You have all done a very impressive job driving revenues and reducing our cost structure, and it is gratifying to see the results first hand.
And on Wednesday, JPMorgan Chase CEO Jamie Dimon, saying he sees "modest signs of recovery," emphasized that he would like to return government money as soon as possible, reports Reuters.
Dimon said that the bank also was profitable in January and February, adding that Wall Street executives working with the government should help end the financial crisis by the end of the year.
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