JPM exhibits balance sheet and economic earnings heft as it lowers its economic outlook, but leaps over regulatory capital minimums. Sell on debt but Buy on Perpetual Preferreds. Strong Buy on Stock. Regulatory Risk Medium, Counterparty Risk Low-to-Medium.
Bank of America is preparing for a long recession and boosted its reserves for CECL and the virus outbreaks. Claims it should perform better than in the past cycles as it raised consumer loan quality. Sell Stock, Sell benchmark Bonds. Raise Counterparty and Regulatory Risk to Medium range.
We provide an in-depth report outlining Wells Fargo's serious exposures to commercial real estate, other at-risk sectors like oil & gas, and CLOs. We first were highly concerned about CLOs last July. Rating agency downgrades will worsen these valuations. Sell on Stock, benchmark Bonds. Regulatory & Counterparty risk rise to High from Low to Medium.
Viola Risk presents a comprehesive review of Citigroup and utilizes economic earnings and systemic capital shortfall analysis to show its higher risk levels vs. the other Big 4 banks. Sell Stock, be choosy on Buys on Bonds. Regulatory risk High, Counterparty Medium-to-High.
JPMorgan was the first big bank to show the higher reserve action impacts from the COVID-19 pandemic. While there are still many questions as to length and severity, JPM has the economic earnings strength, reserves and capital to weather the difficult environment. Sell on Bonds, Buy Stock, Counterparty & Regulatory risk is Low-to-Medium.
Interest rate risk is the most prominent headwind facing most banks. BAC presents the most details on its derivative strategies to preserve net interest margins. And better organic growth is helping as well. We explore these dynamics from the 10K.
JPMorgan's Investor Days have been so succesful that they may not have them every year. Wow! We explore the bank's huge volume generation capability that stabilizes and allows growth in earnings.
RF continues to be loan challenged and margin squeezed. Fed rates reversal sends it to the swaps sanitorium to preserve margin sanity. Sustainability of loan growth credit quality is questionable.
M&T Bank's 2019 10K shows the power of its CRE franchise that continues to grow. Recreational finance and autos are fast growing consumer lending sectors as well. We explore the concentration risks and hedging/derivative strategies to lock in loan yields and preserve margins.
MS fills in the online trading and deposits gaps with its acquisition of E*TRADE. Kind of pricey, but fits well into their strategic goals. Still a Buy on Stock and benchmark bonds. Counterparty risk stays at Medium level.