Not pretty for Bank of America…
~~~~ “Inevitable, really. Having whittled bank valuation metrics down to tangible book values, analysts are now starting to question how tangible those books might actually be.
An interesting note out of Citigroup this week focuses on the issue of deferred tax assets, which in the case of Spanish banks in particular seem to take up an unusually large footprint on the balance sheet at institutions like Santander and BBVA.
Tax assets, whether from past losses, acquisitions or whatever, clearly have a real benefit - but only in so far that you usually have to earn profits in the future to realise the off-set value.
In Britain, RBS has just managed to monetise the value of its own deferred tax assets by using them to part-pay for the government’s toxic asset insurance scheme. But elsewhere, the trend has been towards writing down the value of DTAs at the likes Fortis, which recently wrote-down €1bn of such assets.”~~~~
Rotten banks worldwide… yes… our problems are global in scope… transparency friends… you cannot cover up this much trash indefinately… let’s come clean and take the real losses… courage…
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