Deal Autopsy: Jamie Dimon’s a Whiner; Wells Fargo is Smart; Bank of America is a Mess
The big deals of the financial crisis – emergency acquisitions pulled off by JPMorgan (JPM), Wells Fargo (WFC) and Bank of America (BAC) – have had mixed results, and a smart Washington Post article by Danielle Douglas sorts out the details in the wake of self-serving complaints by JPMorgan CEO Jamie Dimon.
Dimon, seeing his company facing litigation for the deeds of acquire Bear Stearns, recently complained that he mightn’t be able to do such a deal again. It was simply Dimon’s way of lobbying (some more) for an easier time from regulators in Washington.
“It was the best risk-sharing negotiation Jamie Dimon has ever done. So for him to come back now and say it was a bad deal is just posturing,” Mark Williams, a former bank examiner who teaches finance at Boston University, told the Washington Post “Jamie Dimon was given a gift by the government,” he said. “Not only did JPMorgan get the fifth largest investment bank for about $1 billion in the end, but they got a Midtown Manhattan office building worth $1.2 billion.”
Overall, how did the banking giants do on the deals? Surely, they expanded, the result being that they’re even more too-big-to-fail than before.
JPM Total Assets data by YCharts
But how have they done with those assets? Bank of America horribly, it’s clear, as losses from both Merrill Lynch and Countrywide have piled up. JPMorgan so-so, which is how the bank performed before the bottom fell out of things. And Wells Fargo increasingly is getting back to its superior return on assets.
JPM Return on Assets data by YCharts
From the editors of YCharts, which includes the just-released YCharts Pro Platinum for professional investors.
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