The Institutional Risk Analyst

In this edition of The Institutional Risk Analyst, we ponder the world of credit and investing as sovereign nations see their debt ratings sinking below that of global corporations. Meanwhile, the price of gold is reaching new highs. Then we set up the Q3 earnings of the top-seven US depositories for subscribers to our Premium Service as we surge into quarter end with equity markets at all-time highs and global central banks turning the money spigots wide open.

The largest bank loan portfolio increases reported by the FDIC were in loans to non-depository financial institutions and broker-dealer loans to purchase or carry securities, including margin loans. This situation is inherently unstable.

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?

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

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

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

The Q3 interest rate rally still leaves the industry with a negative capital position since the average securities yield is only 3%

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

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.

The largest banks continue to serve as a haven for refugees from crypto fraud schemes and the fintech swoon, but are not cheap

U.S. Bancorp, PNC and Truist Financial hold great value creation potential. But which is likely to realize this potential?

We think that a strong case can be made that to enhance shareholder value, Moynihan and the BAC board ought to spin-off Merrill Lynch...

In this edition of The Institutional Risk Analyst, we assign a neutral risk rating to Wells Fargo & Co, the fourth largest US bank

This week we make the bear case for the housing sector as several more large mortgage issuers announce IPOs....