Deutsche Bank has posed some key questions currently facing banks:
1. With NII/NIMs being pressured by continued declines in interest rates, how will banks increase/maintain revenues?
2. After being net sellers of securities in 2Q, the largest US banks have been net buyers of securities so far in 3Q, despite a further decline in rates. Why are banks buying securities now?
3. BBT recently pulled a large portfolio of distressed loans from the sales market. What drove this decision and will this have read-throughs for other banks' ability to sell NPAs?
4. With recent signs of some weakening in the economy, will this increase the amount of DTA that is excluded from regulatory/GAAP capital (after seeing declines at some banks in 2Q)?
5. CMA recently announced it will redeem all of its $500M of TruPs at par. Should we expect similar moves from other banks? (Note that the largest 17 US banks have over $100B of TruPs outstanding).
6. Given improved capital/reserves at many banks and an outlook for a continued sluggish revenue environment, a number of banks believe M&A will pick up soon.
7. Mortgage rates have declined about 25bps since 6/30 and refinancing application activity has increased meaningfully. Given this how will prepayments effect reinvestment risk in banks' securities portfolios?
Deutsche Bank's current ratings for these banks:
Bank of America BAC,USD13.50 Hold
BB&T BBT,USD23.56 Hold
Citigroup C,USD3.91 Buy
Comerica CMA,USD36.93 Hold
First Horizon FHN,USD10.60 Hold
Fifth Third FITB,USD11.92 Hold
Huntington HBAN,USD5.73 Hold
JPMorgan Chase JPM,USD39.17 Buy
KeyCorp KEY,USD8.03 Hold
Marshall & Ilsley MI,USD7.07 Hold
M&T Bank MTB,USD88.93 Hold
PNC PNC,USD54.93 Buy
Regions Financial RF,USD6.89 Hold
SunTrust STI,USD24.18 Buy
TCF Financial TCB,USD15.52 Hold
US Bancorp USB,USD22.67 Hold
Wells Fargo WFC,USD25.84 Buy
Zions ZION,USD20.36 Hold
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Posted In: Analyst ColorNewsGuidancePre-Market OutlookMarketsAnalyst RatingsBank of AmericaBB&TCitigroupcomericaDeutsche BankDiversified Banksfifth thirdFinancialsfirst horionhuntingtonJP MorgankeycorpM&T bankmarshall & isleyOther Diversified Financial ServicespncRegional Banksregions financialSunTrusttcf financialus bancorpWells Fargozions
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in