DFAST 2019 waved the white flag for shareholder payouts manna. Still, if every bank passes what is the value of the tests? We explore the inadequacies of identifying the real world risks across volatility, leveraged lending, structure and securitization risks that the stress tests may miss.
VantageScore, the #2 US consumer credit scoring company, recently interviewed David Hendler for its "5 Questions" monthly newsletter column. David discussed his US Consumer Risk Outlook, the validity of credit scores in predicting future downturns, and how the Millennials should credit trend given their "thin-file" history.
Regional bank takeovers heating up in the US, but is it necessary as App Smartphone Banking is making huge in-roads? We explore the key factors in the M&A check-list to see the real economic earnings Buyers & Sellers. And those that may still hang out under the lamp-posts.
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.