Latest news with #capital
Yahoo
5 hours ago
- Business
- Yahoo
Deregulation Price Catalyst Spurs Bank of America Stock (BAC) Bulls
Bank of America (BAC) is standing at the edge of a transformative moment. A wave of deregulation is about to sweep through the financial sector, promising to loosen the tight capital and compliance rules that have weighed on banks for years. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter For BAC, this could mean more cash to lend, fatter investment banking fees, and juicier shareholder returns. While the stock has climbed to new 52-week highs, it is still priced as a value play. Therefore, I'm Bullish on BAC stock. Momentum is building around deregulation, with major banks like Bank of America (BAC) poised to benefit. Potential rollbacks to Basel III capital requirements could unlock billions by lowering reserve thresholds, giving BAC more room to lend. In Q1, the bank reported $14.44 billion in net interest income on its $2 trillion deposit base, and analysts suggest that a looser regulatory environment could increase this figure by 6–7% this year, meaningfully boosting earnings. At the same time, compliance costs—long a drag on profitability—may finally ease. BAC's recent removal from a consumer watchdog's oversight hints at a broader regulatory reprieve. If oversight continues to soften, the bank could not only lower expenses but also redirect capital toward growth areas like small business loans and mortgages. Bank of America's investment banking and trading divisions stand to gain significantly from a potential wave of deregulation. Looser rules tend to drive M&A activity, IPOs, and market volatility—ideal conditions for BAC's Global Markets unit. In Q1, equities trading revenue surged 17% to a record $2.2 billion, and fixed income climbed 5% to $3.5 billion, as Main Street Data shows. While investment banking fees dipped 3% to $1.5 billion, reflecting a broader slowdown in U.S. M&A, CEO Alastair Borthwick pointed to a strengthening deal pipeline. A more business-friendly climate under the Trump administration could accelerate this recovery. Meanwhile, the ongoing market resilience, even amid geopolitical tensions, signals investor optimism regarding pro-growth policies. For BAC, that translates into more opportunities to capitalize on volatility. Should deregulation spark renewed corporate deal flow—or support BAC's push into digital assets, such as its proposed USD-backed stablecoin—the bank could unlock new revenue streams and deepen its market advantage. Deregulation could be a goldmine for BAC's shareholders as well. With less capital tied up, BAC can ramp up buybacks and dividends. In Q1, earnings rose 11% to $7.4 billion, backed by a robust Common Equity Tier 1 ratio of 11.8%, well above the 10.7% minimum. This gives BAC plenty of room to return capital if these ratio requirements go down. Today, it has a $0.26 quarterly dividend yield of 2.25%, which the company has grown for 11 straight years, with 16 years of dividend growth to boot, according to TipRanks data. Meanwhile, projected buybacks for the year reach $18 billion, screaming confidence. In fact, BAC trades at a buyback yield of 4.3% on recent repurchases, which, along with the dividend, form a blended yield of 6.5%. Not bad for a company expected to see notable growth in the near term. In the meantime, the payout ratio stands at just 28.4% this year's consensus EPS estimate of $3.66, so an acceleration in the rate of dividend hikes is indeed possible. At today's share price, BAC stock is trading at its 52-week highs, but in my view, it's still a steal. Consensus EPS estimates project 14% growth to $3.66 in 2025, followed by an acceleration to 17% growth to $4.25 in 2026. Yet, BAC trades at just 12.7x 2025 EPS, which is significantly below that of some of its competitors. For context, JPMorgan's (JPM) 15x and Wells Fargo's 13.5x multiples are higher, despite BAC outpacing their growth forecasts. Tariff fears and potential rate cuts (which could possibly shave $3.3 billion off net interest income if rates drop 100 basis points) could spook investors. However, BAC's strong wealth management inflows and trading gains suggest that the impact may not be as harsh on a consolidated basis. Wall Street's stance on Bank of America stock is quite bullish. As things stand, BAC carries a Strong Buy consensus based on 18 Buy and two Hold ratings in the past three months. BAC's average 12-month price target of $49.50 implies a potential upside of approximately 6%, suggesting that many analysts believe the stock could continue to rise despite trading just below 52-week highs. Bank of America is approaching a pivotal moment, with potential deregulation poised to unlock fresh growth opportunities. Positioned to boost lending, energize its capital markets division, and enhance shareholder returns, BAC looks compelling—especially at just 12.7x earnings and with EPS expected to rise 14–17% in the near term. While macroeconomic risks, such as trade tensions and interest rate shifts, remain, the bank's strong balance sheet and diversified operations provide a solid foundation for continued performance and investor upside. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
Bloomberg
15 hours ago
- Politics
- Bloomberg
Trump to Spend Rare DC Weekend Harrying Senate on Tax Bill
This is Washington Edition, the newsletter about money, power and politics in the nation's capital. Every Friday, White House correspondent Akayla Gardner delivers a roundup of the key news and events in politics, policy and economics that you need to know. Sign up here and follow us at @bpolitics. Email our editors here. President Donald Trump wants senators working through the weekend on his megabill of priorities from tax cuts to immigration. He's spending a rare weekend in Washington, too — skipping his usual trek to New Jersey — as he seeks to get fellow Republicans in line.
Irish Times
a day ago
- Business
- Irish Times
What's stopping us converting Dublin's O'Connell St into a residential neighbourhood?
It's not bad people who destroy cities, it's bad incentives. Bear this economic rule in mind when digesting the State's welcome initiative to save Dublin city , which was unveiled this week. 'Saving the city' might sound dramatic, but without significant remedial action, Dublin as an attractive, lived-in and innovative capital is over. We know that parts of the city are falling down, blighted by dereliction, vacancy and a general feeling of decay. The capital city of one of the richest countries in the world looks so dilapidated because it is not profitable to build homes there. If we change the incentive structure to make it profitable, improvements will follow. Great cities die without care – as many Americans know. Cities are built from the bottom up, not top-down. Unless citizens are given an opportunity to participate in regeneration, big government initiatives will fail when initial investment is not supported by ongoing incremental spending. From now on, it must be cheaper and more profitable to build, renovate and restore in the city than anywhere else in the country. This means using the tax system to create incentives in specific areas and even specific streets. Once the incentive – and this means the price – is right, builders will respond and invest enthusiastically. The Dublin City Taskforce has unveiled a blueprint to rejuvenate the capital's centre , calling for €750 million to €1 billion in new investment and identifying 'Ten Big Moves' to restore safety, vibrancy and liveability in the capital. While these proposals are all urgently needed, the real prize is to get investment money flowing into the capital on a daily basis. READ MORE The source of this investment should be the €150 billion of ordinary Irish people's savings that is sitting on deposit in the banking system, doing nothing. In the same way as living creatures require a constant flow of blood pumped by the heart, cities need a constant flow of money, incentivised by constant profitable opportunity. The domestic banking system could be the source of this investment. [ Dublin is fifth most expensive capital in Europe for living costs Opens in new window ] The traditional role of the banking system is to recycle savings of those who don't want to spend and make that money available to those who want to invest. Unfortunately, the Irish banking system acts more like a safe-deposit box in which savings are parked and not used profitably in the economy, despite the average of only 0.13 per cent interest earned. A special savings vehicle targeted at refurbishing old buildings with a tax break would liberate 10s of millions of euro into the centre of the city. Any successful redevelopment of Dublin city must incorporate a tax scheme to coax that money out of the deposits and into private residential building. The best example of reinforcing tax programmes were the urban renewal efforts of the 1990s, where huge swathes of derelict Dublin were rebuilt, and thousands of apartments were constructed in the city. It was tax-efficient to buy and live in these properties, which benefited from generous tax breaks for mortgage-holders, which made it a no-brainer to live in the city as opposed to the suburbs. Temple Bar was a good if uneven example of the success of such directed tax schemes. The new plan for the city, which proposes a special purpose vehicle – a fancy term for an independent State body – looks to be based on a similar tax structure, which is promising. Overall, this Government initiative is positive, but to make it work effectively and to tie it in with an ongoing financing requirement from the private sector, there must be a little more financial and fiscal creativity. As well as encouraging people to move into the city, it is essential to dissuade owners from hoarding or allowing buildings to become derelict Once it makes financial sense to live in the city, people will do so. People – not police – make a city safe. People police their own streets. Empty streets are dangerous streets, lively streets are safe streets, and the more people who live in an area, the more they look after their own patch. This is called having a stake in the place, and residents have a greater stake than passersby. Of course we need more gardaí on the streets, but the real game-changer is locals turning a street into a neighbourhood. For example, there are officially no residents on O'Connell Street, not one. Yet over the shops is ample space for living. What is stopping builders from converting O'Connell Street into a residential street? Incentives again. Make it tax-efficient to refurbish and tax-efficient to buy these flats, and people will come. [ Ruby Eastwood: Why would anyone choose to live in a city as ridiculous as Dublin? Opens in new window ] I've personal experience. In the early 1990s, on an average salary (IR£16,000 a year), I bought a flat on Parliament Street, in a building that was the first residential owner-occupier initiative on that street in more than 100 years. The small first-time developer was incentivised by tax breaks to buy the derelict building, and that made the refurbishment feasible. He built three flats above the ground-floor shop front. We were the only residents on Parliament Street, which was otherwise bleak and dilapidated. There were no shops or restaurants, and the roofs of many of these beautiful buildings were falling in. Lots of people thought it was mad to buy in the city, but it was much cheaper than renting in the suburbs. As a young owner, my monthly mortgage was dramatically reduced by a significant tax break. In the following few years we were followed by many more residents, and the same incentives allowed young people to buy and encouraged many young developers to take a risk and imagine a residential future over the shop for old, unloved buildings. It worked, and today Parliament Street, soon to be pedestrianised , is a wonderful place to live. Why not copy and paste this model in hundreds of city streets? As well as encouraging people to move into the city, it is essential to dissuade owners from hoarding or allowing buildings to become derelict. Again, incentives pave the way. Dereliction and vacant sites are the results of choices made by owners. It is time to put a draconian price on those choices. Urban policy should penalise bad behaviour such as presiding over dereliction, and reward good behaviour such as refurbishing old buildings. It's not that difficult, is it? We should start with vacant buildings. Recent figures from An Post's data company GeoDirectory estimate that 14,500 residential and commercial properties lie vacant across Dublin – 4,000 of which are in the city centre. There has been a marked deterioration since last year, and things are getting worse. The majority (63 per cent) of these properties have been unoccupied for one to two years, with a minority of about 23 per cent idle for more than four years. Between the canals, there are 4,082 vacant buildings. Half of them are commercial, roughly a third residential and the remainder mixed-use. The greatest concentration is in Dublin 2, home to 41 per cent of these vacant buildings, the vast majority (75 per cent) of which are commercial. D1's Victorian commercial districts (Parnell, Talbot, Capel and Dorset streets) account for more than half (610) of the vacant flats above commercial units. This column has suggested an amnesty for people who might own these properties but don't have the money or the legal clearance to refurbish them. The State could force them to sell by offering them a chance to avoid hefty penalties if they sell within a year. If not, tax them at source on other income and put the property on the market. The resulting glut of properties would force prices down, allowing responsible new owners who intend to build to buy at a bargain price. In no time the city would be transformed. We've done it before. Incentives work. Let's do it again.
Yahoo
a day ago
- Business
- Yahoo
We Like These Underlying Return On Capital Trends At Tanco Holdings Berhad (KLSE:TANCO)
What are the early trends we should look for to identify a stock that could multiply in value over the long term? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So on that note, Tanco Holdings Berhad (KLSE:TANCO) looks quite promising in regards to its trends of return on capital. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Tanco Holdings Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.06 = RM23m ÷ (RM489m - RM97m) (Based on the trailing twelve months to March 2025). Therefore, Tanco Holdings Berhad has an ROCE of 6.0%. Ultimately, that's a low return and it under-performs the Industrials industry average of 7.6%. Check out our latest analysis for Tanco Holdings Berhad While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you're interested in investigating Tanco Holdings Berhad's past further, check out this free graph covering Tanco Holdings Berhad's past earnings, revenue and cash flow. We're delighted to see that Tanco Holdings Berhad is reaping rewards from its investments and is now generating some pre-tax profits. The company was generating losses five years ago, but now it's earning 6.0% which is a sight for sore eyes. And unsurprisingly, like most companies trying to break into the black, Tanco Holdings Berhad is utilizing 114% more capital than it was five years ago. This can tell us that the company has plenty of reinvestment opportunities that are able to generate higher returns. In another part of our analysis, we noticed that the company's ratio of current liabilities to total assets decreased to 20%, which broadly means the business is relying less on its suppliers or short-term creditors to fund its operations. So this improvement in ROCE has come from the business' underlying economics, which is great to see. To the delight of most shareholders, Tanco Holdings Berhad has now broken into profitability. Since the stock has returned a staggering 3,958% to shareholders over the last five years, it looks like investors are recognizing these changes. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist. While Tanco Holdings Berhad looks impressive, no company is worth an infinite price. The intrinsic value infographic for TANCO helps visualize whether it is currently trading for a fair price. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
a day ago
- Business
- Globe and Mail
Deregulation Price Catalyst Spurs Bank of America Stock (BAC) Bulls
Bank of America (BAC) is standing at the edge of a transformative moment. A wave of deregulation is about to sweep through the financial sector, promising to loosen the tight capital and compliance rules that have weighed on banks for years. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter For BAC, this could mean more cash to lend, fatter investment banking fees, and juicier shareholder returns. While the stock has climbed to new 52-week highs, it is still priced as a value play. Therefore, I'm Bullish on BAC stock. Unleashing Lending Power Through Deregulation Momentum is building around deregulation, with major banks like Bank of America (BAC) poised to benefit. Potential rollbacks to Basel III capital requirements could unlock billions by lowering reserve thresholds, giving BAC more room to lend. In Q1, the bank reported $14.44 billion in net interest income on its $2 trillion deposit base, and analysts suggest that a looser regulatory environment could increase this figure by 6–7% this year, meaningfully boosting earnings. At the same time, compliance costs—long a drag on profitability—may finally ease. BAC's recent removal from a consumer watchdog's oversight hints at a broader regulatory reprieve. If oversight continues to soften, the bank could not only lower expenses but also redirect capital toward growth areas like small business loans and mortgages. Capital Markets Ready to Roar Bank of America's investment banking and trading divisions stand to gain significantly from a potential wave of deregulation. Looser rules tend to drive M&A activity, IPOs, and market volatility—ideal conditions for BAC's Global Markets unit. In Q1, equities trading revenue surged 17% to a record $2.2 billion, and fixed income climbed 5% to $3.5 billion, as Main Street Data shows. While investment banking fees dipped 3% to $1.5 billion, reflecting a broader slowdown in U.S. M&A, CEO Alastair Borthwick pointed to a strengthening deal pipeline. A more business-friendly climate under the Trump administration could accelerate this recovery. Meanwhile, the ongoing market resilience, even amid geopolitical tensions, signals investor optimism regarding pro-growth policies. For BAC, that translates into more opportunities to capitalize on volatility. Should deregulation spark renewed corporate deal flow—or support BAC's push into digital assets, such as its proposed USD-backed stablecoin—the bank could unlock new revenue streams and deepen its market advantage. Shareholder Returns Set to Shine Deregulation could be a goldmine for BAC's shareholders as well. With less capital tied up, BAC can ramp up buybacks and dividends. In Q1, earnings rose 11% to $7.4 billion, backed by a robust Common Equity Tier 1 ratio of 11.8%, well above the 10.7% minimum. This gives BAC plenty of room to return capital if these ratio requirements go down. Today, it has a $0.26 quarterly dividend yield of 2.25%, which the company has grown for 11 straight years, with 16 years of dividend growth to boot, according to TipRanks data. Meanwhile, projected buybacks for the year reach $18 billion, screaming confidence. In fact, BAC trades at a buyback yield of 4.3% on recent repurchases, which, along with the dividend, form a blended yield of 6.5%. Not bad for a company expected to see notable growth in the near term. In the meantime, the payout ratio stands at just 28.4% this year's consensus EPS estimate of $3.66, so an acceleration in the rate of dividend hikes is indeed possible. A Bargain Hiding in Plain Sight At today's share price, BAC stock is trading at its 52-week highs, but in my view, it's still a steal. Consensus EPS estimates project 14% growth to $3.66 in 2025, followed by an acceleration to 17% growth to $4.25 in 2026. Yet, BAC trades at just 12.7x 2025 EPS, which is significantly below that of some of its competitors. For context, JPMorgan's (JPM) 15x and Wells Fargo's 13.5x multiples are higher, despite BAC outpacing their growth forecasts. Tariff fears and potential rate cuts (which could possibly shave $3.3 billion off net interest income if rates drop 100 basis points) could spook investors. However, BAC's strong wealth management inflows and trading gains suggest that the impact may not be as harsh on a consolidated basis. What is the Price Target for Bank of America? Wall Street's stance on Bank of America stock is quite bullish. As things stand, BAC carries a Strong Buy consensus based on 18 Buy and two Hold ratings in the past three months. BAC's average 12-month price target of $49.50 implies a potential upside of approximately 6%, suggesting that many analysts believe the stock could continue to rise despite trading just below 52-week highs. Deregulation Tailwinds Could Power Next Leg of BAC Growth Bank of America is approaching a pivotal moment, with potential deregulation poised to unlock fresh growth opportunities. Positioned to boost lending, energize its capital markets division, and enhance shareholder returns, BAC looks compelling—especially at just 12.7x earnings and with EPS expected to rise 14–17% in the near term. While macroeconomic risks, such as trade tensions and interest rate shifts, remain, the bank's strong balance sheet and diversified operations provide a solid foundation for continued performance and investor upside.
