BofA, Citi: We're Just Fine, Thanks
Two large banks largely assumed to be among the nation's most troubled, Citigroup, Inc. (C) and Bank of America Corp. (BAC), are taking to the press machine this week with a singular message: stop worrying about us. If it weren't enough for Bernanke to suggest in a speech earlier this week that Federal regulators will not allow certain "too big to fail" banks hit the failure point -- at least in the traditional sense -- both banks have been aggressively suggesting to investors this week that they are on the road to recovery, helping fuel a strong rally in both their own stock and broader equity markets. Citigroup Inc. chairman Richard Parsons told Reuters in an interview late Thursday with Reuters that the bank doesn't need new capital from the government, and said the bank will not be nationalized -- investors have fretted for weeks over the bank's murky future. Parsons didn't just suggest Citi was okay. He suggested to the news service that "with the latest conversion ... Citi is actually one of the better capitalized banks in the world." Strong words for a bank recently seen trading below $1/share. "I have a lot of confidence in the future viability and strength of a privately held Citi," Parsons also said. Not to be outdone, earlier in the day, BofA chief Ken Lewis -- who earlier had bashed Citigroup -- said Thursday that the North Carolina-based bank was profitable during the first two months of 2009, echoing comments made earlier in the week by Citigroup CEO Vikram Pandit regarding the rival bank's own business. JP Morgan Chase (JPM) CEO Jamie Dimon has also said his bank turned a profit so far this year. Lewis went so far in his remarks, delivered at the Chief Executive Officers Club of Boston, as to suggest that BofA would "probably" post a net profit during 2009, and also scoffed at the idea that any bank would be nationalized. “It would give the false impression that all banks are insolvent and investors would immediately start betting on which banks would be next, possibly creating a self-fulfilling prophecy," he was quoted as saying by the Financial Times. BofA executive Barbara Desoer, who runs the bank’s mortgage and home equity lending operations, also made a press round Friday, suggesting that the bank's acquisition of Countrywide Financial “is really paying off” amid a refinancing boomlet. Shares in Citigroup were at $1.80, up 7.78 percent, when this story was published. Bank of America was at $5.96, up 1.88 percent, despite a Dow Jones Industrial Index that was trading slightly lower. Write to Paul Jackson at email@example.com. Disclosure: The author held various put option contracts on JPM when this story was published, and held no other relevant investment positions. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.