Regions continues to use its hedges as a crutch as it waits for loan growth. Still a weaker core franchise than the bigger regional banks. Pressure on Stakeholder Stack over the long term.
GS posted another knock-out quarterly result as it just about recorded record net revenues across-the-board. We compare its performance to capital market peers where it leads in the lucrative categories. Buy on stock, Sell on benchmark bonds, Systemic and counterparty risk Low despite Archegos liquidation.
BAC had a weak consumer & card that should rebound as economy further strengthens. Like other capital market players, it had robust investment banking and trading especially in equity underwriting. Buy on stock, Sell on benchmark bonds. Systemic risk Very Low, counterparty risk Low.
MS had a blow out revenues quarter driven by SPAC and equity effervescence. Other areas in M&A and fixed income were very strong too. But it got partially blown up on Archegos mass liquidation vortex. Still Buy on stock, Move to Buy on benchmark bonds, Very Low systemic risk, Low counterparty risk.
Citi comes up with another strategic refresh plan. But new CEO Fraser seems more convincing as she focuses on Citi's competitive advantages. Move to Neutral on stock and benchmark bonds. Regulatory and counterparty risk at Medium levels.
JPM shakes off pandemic funk with investment banking, capital markets and trading responding to strong market conditions. Still loan growth is lagging and should respond better as economy further rebounds with vaccine penetration increasing to herd immunity levels. Buy on Stock, Sell on benchmark bonds. Systemic risk Very Low, and counterparty risk Low.
WFC does not have the core drivers gas to justify its stock surge. EPS beat was on reserve releases and restructuring needs to continue. Still some small progress on business/asset sales. Move to Neutral on stock, Sell on benchmark bonds. Regulatory and counterparty risk remains High.
Wells Fargo's 10K shows the most securities shrinkage of the big banks as it had the asset cap and less lending opportunities in the Covid environment. CLOs still high relative to pack and indicative of its higher risk appetite.
Merger Monday strikes again as M&T follows through on its intentions and agrees to acquire Peoples Bank of CT. More community banking with scale in the Northeastern states from Boston to Buffalo to NYC metro to Baltimore region. CRE concentrations fall a bit, and M&T's higer FCF helps both. Sell on M&T benchmark bonds, Hold on Stock. Regulatory and counterparty risk Very Low and Low, respectively.
MTB holding up well in CRE as government stimulus helps out for it and the banking industry. Hedges rolling off and no clear message on stock buybacks. Turn to Buy on Stock and maintain Sell on benchmark bonds. Systemic and counterparty risk at Very Low and Low, respectively.