The Institutional Risk Analyst

Whalen Global Advisors LLC (WGA) has published the latest edition of the WGA Top 50 Banks, the fifty top performing large commercial banks in the US. Drawn from the members of Peer Group 1 and other sources, WGA screens the group based upon five proprietary measures of financial and market performance.

Citi has grown corporate loans 10% to $330 million at the end of Q2 2025. In fact, Citi increased its full-year net interest income guidance and raised its revenue forecast to the high end of its previous range. Citi saw assets and NII grow in 2025, but efficiency remained in the low 60s, a tangible indication that Fraser is making progress.

Paying interest on reserves has nothing to do with whether banks lend and everything to do with enabling the Fed to manage the Treasury market. If you don’t want the Treasury market to remain open, then take away the Fed’s power to pay interest on reserves.  

We noted in the most recent IRA Bank Book that the Q1 2025 banking industry data from the FDIC was showing improvement in certain commercial line items, particularly non-owner occupied real estate. But is this another head fake by desperate banks trying to conceal rancid commercial real estate exposures?

As of yesterday's close, BK was right behind SoFi Technology (SOFI) leading the bank surveillance group higher. BK closed yesterday at 14x forward earnings and 1.6x book value, roughly the same PE multiple as JPM but at a lower book value multiple.

“Our operative assumption is that the strong economy and continued high inflation expectations will mitigate against any interest rate cuts in 2025,” Whalen notes. “We expect to see the FOMC end the shrinkage of the central bank’s balance sheet, which should help to increase the very low growth rates for bank deposits.”

Even a small decrease in prepayments due to higher LT interest rates could significantly impact the fair value of the Bank of America mortgage portfolio, forcing unrealized losses higher. If LT rates continue to rise, one veteran banker told The IRA yesterday, then BAC and several other large banks are going to start to literally shake apart from unrealized losses on COVID era assets.

President Trump will not try to fire Chairman Powell. Why not? First, because Powell cannot be removed save for malfeasance. Second, because firing Powell would seriously piss off Senate Republicans, killing Trump's hopes for tax legislation this year.

Some of the largest banks by assets have dropped from the top quartile into the bottom half of the distribution for the top 100 banks

If we consider the larger picture, we already have years of pent-up credit expenses awaiting realization, but add to the sauce Donald Trump.

If we told you that the Trump White House was planning to end the issuance of all agency MBS, how do you think this will impact financials?

Industry results in 2024 were reasonably good, but the banking industry is still 200 bp below 2019 levels of asset and equity returns

Banks continue to show a strong preference for late vintage loans over securities, a fact which may cause loan yields to continue falling

Without profits from commissions and capital markets, BAC would have reported a down quarter due to higher funding and operating expenses.

Citi seems to be tracking the group now, whereas pre-COVID the stock significantly underperformed in terms of market beta. But performance?

The banking industry has segmented into a handful of above-average performers and JPM is the largest leader of these "winners"

It’s time for the Fed to get smart on duration risk before circumstances create another money market crisis. 

How is Goldman going to extricate itself from this profoundly unattractive business with AAPL without destroying Apple Card?

Axos continues to rebound after the bear raid by Hindenburg Research. AX ranked 18th in the WGA Bank Top Index in Q3 2024 vs 98th for SOFI

Banks lose money every single day by holding onto a below market security from the 2019-2021 period.