The Institutional Risk Analyst

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.

We hear in the channel that banks with festering multifamily exposures are paying north of 10% for similar CRT transactions.

GS saw loss provisions fall slightly in Q2 2024 to $282 million but the number was still $600 million in the first half of the year...

Notice that the Fed stress test is silent on trillions of dollars in mark-to-market losses facing US banks from COVID-era securities

The Fed bank stress tests are another sign of magical thinking in Washington.

Citigroup leads the pack with a net loss rate of 133 basis points (bp) that is almost five times the average for Peer Group 1 at 27 bp.

BMO arguably has the weakest reserve position among the large Canadian banks....

Our Bank Top 10 and Top 25 indices continue to outperform the industry benchmarks, but the broader samples show growing financial stress

The yield on BAC's $320 billion commercial and industrial (C&I) book was just 5.4% or more than 150bp below peer at year-end 2023.

BAC is in big trouble, not due to credit but because of sub-par asset returns. BAC’s return on assets has fallen to just 0.8% in Q1 2024

The net losses disclosed by BAC and the other large banks at the end of Q4 2023 are significantly understated...

We see higher credit costs, narrowing NIM and still rising funding costs squeezing the banking industry in Q1 2024...

Not all banks or companies are the same and not all follow the herd.

We think that the whole banking industry could be driven into multiple periods of loss as they divert income to loss provisions. 

AXP is a premium stock that is best acquired when people think, incorrectly, that the world is ending.

Look for falling rates sooner rather than later as the Fed and other agencies prepare to resolve more bank failures in 2024.

Citigroup picked up almost 10 points of book value since the end of Q3 2023.