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There's A New Tool That Helps Investors Understand The Corporate Structure Of US Banks

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There's A New Tool That Helps Investors Understand The Corporate Structure Of US Banks

Investors and financial professionals looking to better understand the corporate structure of U.S. banks now have a new tool at their disposal.

OTC Markets Group recently announced the availability of data that visually displays the corporate structure for more than 550 U.S banks that trade on OTC Markets as well as the U.S. exchanges. The move creates more transparency for data that is made available by the Federal Reserve but is otherwise hard for investors to access and not very consumable.

Corporate structure data is particularly useful for financial companies, as these entities can often be comprised of several layers. This is often true for banks, many of which are organized as a 'Bank Holding Company' comprised of several entities, including an operating bank.

“Often, these bank holding companies own assets other than a commercial bank, which retail investors may not be aware of,” said Matthew Fuchs, executive vice president of market data and strategy at OTC Markets Group. “They believe they are investing solely in an operating bank. The structure data will give context to the bank holding companies’ financials and investors can then more easily understand the source of non-commercial bank revenue and expenses.”

The data is the latest set added to Qaravan, OTC Markets’ market data platform for the banking sector. It also includes a visual representation of corporate structure levels, entity names, locations and ownership percentages, and is available on respective bank profile pages on OTCMarkets.com.

Fuchs added that a lot of work had to be done to map the relationships of different corporate entities to each other, and then map that data to the respective trading symbol and issuer.

For example, this is how the information is displayed for Chesapeake Financial Shares, Inc. (OTCQX: CPKF), a Virginia-based bank with several different layers of its corporate structure, including a bank, investment group, and insurance agency.

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Source: OTCMarkets.com

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Source: OTCMarkets.com

 

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