Bank of New York: Financial Loser (Update 1)

Bank of New York Mellon (BK) was the loser among major U.S. financial names on Monday, with shares down over 4% to $20.57.

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The company announced during an investor presentation that its fourth-quarter profit would suffer from incremental expenses ranging from $80 million to $100 million as it implemented a program to save $750 million in expenses by 2015, according to a Reuters report.The broad U.S. were all down 1% as the positive energy from Boeing's (BA) huge new orders and the swearing-in of new Italian Prime Minster Mario Monti, was overshadowed by continuing worries over Italy and Spain and uninspiring comments from German Chancellor Angela Merkal, who said that Europe was "in one of its toughest, perhaps the toughest hour since World War Two," while offering no fresh ideas to solve the eurozone's financial crisis.The KBW Bank Index (I:BKX) was down over 2% to close at 38.58, with the 24 index components showing declines of at least 1%.Shares of Citigroup (C) pulled back over 3% to close at $28.39, as investors "sold the good news" after the company agreed to sell EMI Music Publishing to group of investors to a group of investors including Sony (SNE), Blackstone Group (BX) subsidiary GSO Capital Partners LP, David Geffen and the Estate of Michael Jackson, for $2.2 billion. The deal followed Citigroup's agreement on Friday to sell EMI Group's recorded music business to Vivendi SA's subsidiary Universal music Group, for $1.9 billion.Shares of Bank of America (BAC) declined 35 to close at $6.21, after the company agreed to sell most of its remaining stake in China Construction Bank to a group of investors for $6.6 billion in cash, for an after-tax gain of $1.8 billion. The deal is expected to be completed in November, and will leave Bank of America with a 1% stake in CCB.CEO Brian Moynihan said that the deal would "generate approximately $2.9 billion in additional Tier 1 common capital and further strengthen our Tier 1 common capital ratio by approximately 24 basis points under Basel I."Wells Fargo Securities analyst Matthew Burnell reiterated his neutral rating for Bank of America, but saying he believed that the "sale will move BAC's Tier 1 common capital ratio to slightly above 9.0% by FYE 2011, aided by the 24 bps benefit to its T1C ratio from this sale," and that the implied "sale price of approximately $0.63 [per CCB share] sits about 11% below the 11/14 closing price," which Bank of America "was willing to accept to consummate the transaction."FBR analyst Edward Mills said in a report on Monday that the Federal Housing Finance Agency's expanded mortgage refinance program could lead to an "upside surprise" for Bank of America and other large mortgage servicer. The FHFA will release details of the refinancing plan on Tuesday.Other large U.S. banks seeing 3% declines included Morgan Stanley (MS), which closed at $15.93; Capital One (COF), at $43.83; Fifth Third Bancorp (FITB), at $11.87; KeyCorp (KEY), at $7.23; Northern Trust (NTS), at $38.82; Regions Financial (RF), at $4.03; SunTrust (STI), closing at $18.63.RELATED STORIES: 5 Super Regional Banks on the Rise >Obama Gives Bank of America a Hand: Analyst >Bank of America Sells China Construction Bank Stake for $6.6B >Buffett Likes Diluting All Bank of America Shares, Except His >MF Global Clients Challenge JPMorgan: Report >Gingrich Would Break Up Big Banks >Republicans Want to Break Up Big Banks >'Margin Call' and Volcker Rule: Intervention for Risk Junkies >-- To contact the writer, click here: Philip van Doorn.To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

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