Today is the banks' version of Super Tuesday. In an unusual phenomenon, about two dozen banks across the United States are expected to report...
Today is the banks’ version of Super Tuesday.
In an unusual phenomenon, about two dozen banks across the United States are expected to report their quarterly financial results today. For most, it will include their overall profit or loss numbers for all of last year.
The avalanche of numbers — most expected to be bad, thanks to the continuing mortgage problems — will come from everyone from National City to KeyCorp to FirstMerit to Fifth Third to Wachovia to Bank of America.
Is it coincidence, or was there perhaps some plan to bury bad news in the heap of everyone else’s bad news?
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If you’re a conspiracy theorist, Super Tuesday was made more interesting when National City moved up its announcement date from Thursday to today.
“It was simply a scheduling issue,” said spokeswoman Kristen Baird Adams.
The banks — and all publicly traded companies, for that matter — normally spread their quarterly earnings reports over a few weeks.
Some banks announced results last week and a few will later this month. But this time around, people in the industry are calling today Super Tuesday because of the concentration of banks reporting.
Banking analyst Gerard Cassidy of RBC Capital Markets in Maine said the idea isn’t new among banks.
“There has been a strategy employed over the years … to release weak or bad news all on the same day,” Cassidy said.
“The thinking is it kind of gets lost in the shuffle,” Cassidy said. “But I don’t know if it works or not. The market is pretty all-knowing.”
He added that most banks, including National City and Key, have already warned that the news will be bad.
Economist Ken Mayland of ClearView Economics in Pepper Pike, Ohio, said it could be that many banks simply picked the first business day after the holiday.
“If you kind of want to hide things [in the business world],” he mused, “isn’t Friday the day to do it?”
The most important issue with publicly traded companies is shareholder value, Mayland said.
“Would there be any value in trying to hide as part of a herd? I think the stock market is so big and so sophisticated, there’s not going to be any value in being part of a herd.”
Cassidy said banks would never acknowledge aligning their earnings announcements.
But maybe they hope to benefit by forcing banking analysts and business journalists to spread their attention among so many companies at once that no one bank will be the buzz of the day.
“There’s a bit of truth to that,” he said.