Banks Blow Past Coins on Rate Cuts; Who is the Worst Consumer Lender?

July 3, 2025 | If we told you that large cap financials are outperforming both the S&P 500 and bitcoin over the past month, what would you say?  And with the Fed stress test results out and banks increasing share repurchases and dividends, the party in financials may just be getting started in 2H 2025. 

Below in The Institutional Risk Analyst, we look at the building rally in financials as the political shift in Washington and a return migration of equity managers pushes valuations higher. But the biggest factor driving the rally in large banks may be the lack of any sign of a consumer recession, as we discuss below. Which consumer focused stocks are likely to perform in the coming environment of falling interest rates and rising loan volumes?

Meanwhile, private crypto platform Ripple is joining a long list of firms seeking federal banking licenses in order to escape state-law regulation as money transfer companies. Some observers see the migration of crypto platforms into commercial banks as a positive for the sector, but we’d remind readers that fintechs and crypto platforms that become commercial banks typically become dogs as stocks. Two names: Block (XYZ) and Lending Club (LC). And don’t forget near-bank PayPal (PYPL), another fallen angel among fintech stocks. The private owners of Ripple ought to do the IPO first.

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