Analysis: Close to become the top U.S. lender JPMorgan

A flag hangs on the wall of the stall of JP Morgan company on the floor of the New York Stock Exchange in New York on July 15, 2010.

Credit: Reuters/Lucas JacksonBy David Henry

NEW YORK | Thursday, July 7, 2011 5 pm EDT

NEW YORK (Reuters)--JPMorgan Chase & Co is close to storage past Bank of America Corp. to become the largest bank of the United States, but it will probably get there in a special way - by shrinkage less than his rival.

JPMorgan Chase and Bank of America is more small as they shake the excesses of the years preceding the financial crisis.

JPMorgan becomes the greatest, Chief Executive Jamie Dimon could see the posting of its prudent management before and during the crisis. Fall of Bank of America for the second would illustrate how former Chief Executive Ken Lewis saddled the Bank with bad acquisitions that dampen the current CEO Brian Moynihan.

But the biggest would not better. Most do not reflect the necessarily to superior profitability, or a higher value of the market. Regulators of the World Bank are requirements of capital high on the largest banks and threatening the capital charges even higher if they grow.

"Big is a burden that it is a right, extol", said Gary Townsend, Chief Executive Officer of Hill-Townsend Capital, Chevy Chase Asset Manager, currency manager Maryland that specializes in financial stocks and owns shares in two banks.

It is a switch from the years when Bank of America was to buy banks to satisfy the American appetite for borrowing more, said Ray Soifer, an analyst with long date Bank and the now industry consultant Soifer consultant in Green Valley, Arizona.

"More big was better and banks were happy to be at the top, said Soifer.".

JPMorgan has gained ground on Bank of America for three straight quarters. At the end of March, 2.20 trillions of dollars of JPMorgan of assets were only 3.4% of 2.27 $ trillion short in Bank of America. JPMorgan is already the most valuable Bank on the stock market, with its equity in a value of 50% more than Bank of America.

Analysts differ from how long the switch could happen. Matt O'Connor of Deutsche Bank is JPMorgan, becoming the end of the year. Paul Miller of FBR capital markets, said that it will be the next 12 to 18 months.

But however long the need, analysts agree that neither Bank will be a stretch.

"It is really to be shrinking the least," said Gerard Cassidy, RBC Capital Markets analyst.

Even if JPMorgan becomes largest US Bank by assets, it would be greatest in the world. The Bank is about 600 billion of this title, and there are six other banks between it and the most important. This honour to the last Earl went to BNP Paribas SA. (For a list of the largest banks in the world, double click on: r.reuters.com/zyq52s)

JPMorgan spokesman Joseph Evangelisti has refused to comment on.

COUNTRYWIDE A BIG MISTAKE

The trend towards the bottom of the United States does not follow a straight line. Banks sometimes temporarily pump of budgets to manage their interest rate risks, said Soifer. And there may be times along the way in borrowing by business loans, as just happened.

Federal Reserve data show that the assets of 25 large banks increased half of one percent in the second quarter, mainly due to several business loans.

In General, analysts said, the banks are not more likely to develop, but now that their clients are attempting to retake their way to happiness on the strength of the rise in the price.

Bank of America and JPMorgan have specific reasons to shrink. To begin with, they have the portfolios of bad assets just before or during the financial crisis. JPMorgan Chase has still more than 80 billion of mortgage loans and credit card credit of low quality, widely acquired when he returned to the lender failed Washington Mutual in 2008.

On 31 March, Bank of America has more than 100 billion of loans in the runoff, primarily in a portfolio that shrank Division maintenance well trained legacy in January. Many of the assets are loans mortgage or loans to have acquired Countrywide Financial, it was purchased in 2008.

The two banks are likely to leave these mature loans without new to replace them, a process called "off running" active.

The acquisition of the country was a particularly important for Bank of America, said Miller of FBR. The agreement has already cost the Bank and more than 20 billion from its capital, said. Part of this money will the door in settlement of $ 8.5 billion these past the Bank of the claims of the guarantee by institutional investors sold more than 22 allegedly defective mortgage-backed securities Countrywide.

Bank of America is selling assets and closure even certain branches of the Bank that it tries to strengthen its balance sheet by getting smaller.

Objective of the Bank is "to balance the amount of assets and the risks," said Jerry Dubrowski, a spokesman for Bank of America. "With the greatest quantity of goods make you the best financial services provider and, for the moment, we're focused on this.".

(Reporting by David Henry in New York; additional reports by Joe Rauch in Charlotte, North Carolina; editing by Andre Grenon)

Banks to meet AIG, close this week recap (Reuters)

NEW YORK (Reuters) - banks, will meet in New York City Thursday to make their case for the right to sell US Treasury stake in American International Group, three people familiar with the matter said Wednesday.

Treasury will be owner of 92.1% of the insurer-out intervened after a recapitalization deal closes. AIG said Wednesday afternoon agreement will close Friday and will result in a charge of $ 3.6 billion in the current quarter. He expected to take large costs associated with the closure.

With this closed market, sources reported a large secondary share offering takeholder billion or more--should sometime in the second half of May.

AIG Chief Executive Bob Benmosche describes a "sense of joy" in the closure of rehabilitation and said the next step for the company to prepare for the sale of shares.

"We have to think about the need to make a capital increase and improve liquidity", he said in an interview, but he declined to comment on synchronization, saying that "we want to be ready as soon as possible."

Society and Government are expected to process the sale as an initial public offer, given its size and its importance as the actual return of AIG participation multiple public property.

AIG is in the hope of attracting an important property of institutional investors, drawing in people who have fled the stock after its September 2008 near-collapse, sources have said.

The Treasury Board and the AIG sell shares in the offer of may; a person familiar with the situation said AIG is to aim to sell 3 billions of dollars in stock at this time.

Two of those familiar with the meeting of the Bank stated that companies are likely to come pitch fee of 75 basis points or less, to the pit of General Motors Co last year taxes.

Such a structure would be much less than usual for an introduction on the stock exchange or an offer on the part of school of this size.

The location of the meeting is unclear, although it is planned to make executives participating banks. A source familiar with the situation said Bank of America Chief Executive Brian Moynihan among those attending.

HUGE ADVANTAGE OF PAPER

Shares of AIG, trading above $58, should return to the range of workplace-$ 40 next week when stock warrants start trading, a source, said Monday.

Even at this beach, however, the Government seek to profit paper in the neighbourhood of $ 27 billion.

That would mark a surprise ending tortured for over two years of back-and-forth on the future of AIG. At one point the Government rescue plan topped $ 182-billion and the company was headed for a break from the sale of fire.

But the Chief Executive, Robert Benmosche, came on board in August 2009, has stopped the sale of fire and leads the company in a different way, sale of certain assets while refocusing the company on life insurer American SunAmerica and global property insurer British company Chartis.

One of the last asset sale program pieces fell into place Wednesday after more than a year of surprises. AIG said it struck a deal to sell Taiwanese life insurer Nan Shan 2.16 billion.

(Reporting by Clare Baldwin and Ben Berkowitz in New York and Joe Rauch in Charlotte.) Written by Ben Berkowitz; (Editing by Carol bishopric and Richard Chang)

European stocks less close after data jobs in the United States (AFP)

London (AFP) - European stocks fell after only the most recent Friday data showing low U.S. jobs hopes for a strong economic recovery, said dealers.

FTSE 100 index of London closed main actions 0.59% at 5,984.33 points, to Paris du CAC 40 fell 1.0% to 3,865.58 points and at the Frankfurt DAX slid 0.48% to 6,947.84 points.

Tempered Amsterdam 0.13%, Milan has dropped 0.46%, stocks dragged Swiss 0.54% and Brussels ended down 0.77%.

Stocks plunged 3.02 percent to Lisbon after the yields on government bonds Portuguese hit New Records, a few days before that the country plans to try to place long-term debt for the first time this year.

European markets have fallen low morning trading before the release of U.S. jobs data and fell more thereafter.

The Department of labor of the United States has published its monthly unemployment report closely monitored which investors had hoped would confirm recent data showing that the U.S. economic recovery taking speed.

But the data offered a mixed picture.

The unemployment rate has strongly to 9.4% in December from 9.8% in November to its lowest level since May 2009 and estimate better than average of 9.7%.

But at the same time, the economy has created 103,000 jobs, much less than 150,000 forecasts by analysts.

A report earlier in the week by the firm of ADP showing a sharp increase in sector private hire at 300 000 in December raised expectations that the U.S. economic recovery could finally begin to replace the jobs lost.

"It's a cold (ish) shower after the excitement generated by ADP," reported earlier this week a stellar rise in private hiring in December, said Ian Shepherdson for high frequency economics.

"Acceleration of the underlying trend but progress is quite slow," he said in a note to customer.

Chairman of the Federal Reserve Ben Bernanke warned that the current rate of job creation was insufficient and meant "long", will require right of the labour market.

"Economic recovery began a year ago and a half East continues," the pattern of the Fed said in testimony prepared for the Congress, "Although, to date, at a pace that was insufficient to reduce significantly the rate of unemployment."

"Probably a considerable time be necessary until unemployment rate returned to more normal levels."

Wall Street has opened the dish and then dragged down.

The Dow Jones Industrial Average fell 0.31% at 11,661.40 points around 1700 GMT, while the index S & P 500, a broader measure of the market, had fallen by 0.37% at 1,269.14 points.

Tech-rich Nasdaq was off the coast of 0.39% to 2,699.29 points.

New year Asia stocks rally showed signs of discolouration Friday in the middle of prudence before data from the United States, while Tokyo's Nikkei hit a top eight months with a stronger dollar, giving boost to auto stocks.

Nikkei index in Tokyo edged 0.11 percent for its end above since May 13, supported by the car manufacturers such as Toyota and Nissan as a strong dollar boosted the US sales prospects.

However, Hang Seng Hong Kong dropped 0.42%, which broke a gathering of seven days. The two exchanges are student to approximately 3 per cent in the week.

Sydney dropped 0.42% at the end of the week in which minor coal have been affected by the catastrophic floods and of commodities slid prices.