French earnings season should be tres interessant as we see the damage from descartian math via equity derivatives and structured notes. French banks in retreat as they find it hard to replace lost leveraged income with core revenues. Sell BNP capital structure. High counterparty & systemic risk. BNP BNP BNP BNP BNP BNP BNP BNP BNP BNP BNP BNP BNP SOCGEN SOCGEN SOCGEN SOCGEN BNP BNP BNP BNP BNP BNP BNP BNP BNP BNP SOCGEN SOCGEN SOCGEN SOCGEN SOCGEN SOCGEN
FinTech fissures are opening up in the banking & finance industry as new players disrupt the old legacy banks. We review the major mega-trends & impacts to big banks, regional banks & specialty finance players for 2019.
Systemic risk looks rather tame in the US, but the same can not be said for Europe and Asia. Still N. American banks should experience credit volatility in 2019 as debt binging meets higher rates and rockier economic backdrops.
Risk managers are dealing with the threats from automated quantitative trading systems. Yet, big trading profits and prime funding of those activities will dictate the ability to pull-up before the next event.
CCAR 2018 saw most big banks pull the rip-cord on capital returns, greater than 100% of earnings. While the big brokers were tempered. JPM shows most growth prospects and therefore tempered its plan below NOPAT. DB USA gets rejected on qualitative, but when will negative news end? We explore.
We move onto the C&I loan loss trends as capital market players and biggest regionals show more loan losses. Mainstream regionals' losses up modestly. JPMorgan an outlier. Capital One too.
DFAST showed capital was prepared for losses. Still the credit loss trends more instructive for future fundamental risk trend analysis. Counterparty & Cards in focus.
Viola Risk Advisors hosted a conference call with Jack Foster of W.S. Foster Associates which conducts credit training seminars. Jack offers his opinions on the holistic nature of credit risk evaluation from key perspectives: rating agency, regulators, commercial & investment banks.
Fifth Third did its first big bank deal in a decade and set off the regional bank merger mania views across the media/sell-side analysts. Using economic earnings analysis, we believe this was a desperation move to find growth. Should meet fierce traditional and FinTech lending pressures. FITB FITB FITB FITB FITB FITB FITB FITB PNC PNC PNC PNC PNC PNC PNC USB USB USB USB USB USB USB KEY KEY KEY KEY KEY KEY KEY
Whether FinTech borrowers will be the "fountain of youth" profits for FinTech lenders is still up for debate. We discuss positive findings from the recent NYU conference on Household Finance and the competitive forces at hand.