Today's CC. A Contrarian ViewAfter listening very carefully to today's cc and Q&A I came to a very different conclusion from all the doom and gloom here. I have been very hard on Masrani thus far, but today I give him full marks for a smooth, confident and succinct delivery, even with his one word but unhesitating responses. The guy is almost 70 and he knows his long career is coming to a close. He is painfully aware that the buck stops with him, especially since the whole AML meshugenah started when he was responsible for US operations. I believe he will try and clean up the mess as much as possible so he can retire with some modicum of dignity in the next one or two Qs.
Uncertainty:
Much of the negative sentiment here and among the analysts has been about the lack of clarity, both regarding the size of the monetary penalties, and the nature and duration of the non-monetary strictures and sanctions to follow. I believe, today, we got a putative answer to both. Let me try and explain.
The senior executives of the bank and their teams of expensive legal talent have been negotiating with the authorities for quite some time. They have a reasonably good grasp of the process and their current stance in it. Hence their statement that they expect the process to conclude by the end of the calendar year. This not a pious hope nor a hail Mary. Likewise the $2.6B amount is not just pasta thrown on the wall hoping it would stick. I wouldn't be surprised at all if the text of today's release had been shown unofficially to certain authorities beforehand.
NonMonetary Sanctions: There has been enough lamentation that the non monetary part could cripple the bank's business for years to come. I beg to disagree. Sanctioning authorities are perfectly content to impose heavy fines which go to their coffers. They are, however, less inclined to impair an enterprise's ability to generate profits, pay taxes and yes pay fines.
All of the above, I admit, is speculative but it did not deter me from adding to my position just under
$78.
Remains to be seen who ultimately will be proven right.
Cheers