Bank of New York, US Bancorp, State Street Earnings Weak

Bank of New York, US Bancorp and State Street reported disappointing results, adding further pressure to bank stocks in pre-market trading:

Bank of New York’s net income dropped 51% on weak fee income and investment losses as custodial account assets declined. The bank slashed its dividend in order to speed up its ability to pay back the TARP. Revenue decreased 24% to $2.85 billion as assets under management declined 20% to $881 billion due to market declines. The custodian also experienced $12 in net outflows due perhaps to customers who were not happy with the aforementioned market declines. In the slightly alarming department, unrealized investment losses increased to $4.5 billion from $74 million the prior year.
US Bancorp’s net curiously also declined by 51% as credit loss provisions increased sharply to $4.11 billion up 69% from the prior year. Net charge-offs rose to 1.72% of average net loans outstanding, up from .76% a year earlier and 1.42% in the prior quarter. Non-performing assets rose to 1.85% from .53% in the prior year and 1.42% in the prior quarter. US Bancorp also slashed its dividend to pay back the TARP.
State Street first quarter income fell 10% to $476 million on a 22% decline in revenue to $2 billion. Curiously, unrealized mark-to-market losses on State Street’s portfolio actually declined to $5.9 billion from $6.3 billion.

In predictable banking news:

The FT claims that senior FDIC officials are considering a successor to Vikram Pandit if the stress tests determine that the bank needs yet another bailout. Well, at least the folks at the FDIC are ahead of the curve on this one, um, sort of.

In hilarious banking news (i.e. why the rest of the world hates investment bankers):

The former head of the Capital Markets Group at Dresdner is actually suing the bank for 1.5 million euros is severance that he claims he is contractually due. Apparently, he seems to think he has a good case, despite the fact that the group he headed was responsible for 5.7 billion euros in losses in 2008. I’m not sure why anyone who already received a 3 million euro severance after punting so much money would think it was worth risking a public stoning to collect a few more bucks, but maybe he just stopped reading the news after he was canned.