Banks

This week's <i>Special Report</i> looks at the three controversial predictions that I made at this year's <i>BCA New York Investment Conference</i>.

Following a temporary reprieve, banks are about to run into a brick wall. The latest Bank For International Settlements (BIS) Quarterly Review[1] made for grim reading on the global loan growth front: the global credit impulse continues to nosedive…

The latest FDIC Quarterly Banking Profile showed that bank earnings' improvement remains lackluster. What caught our attention from the release was the persistent widening in the C&I non-current loan rate, coupled with rising C&I charge-offs. C…

Shift to a small vs. large cap bias as a stealth way to play the overall equity market overshoot. The oversold bounce in banks is not worth chasing, and buy dips in medical equipment stocks.

The euro area's NPL problem is unlikely to be solved quickly, constraining bank profitability and the capacity to lend. There are three important repercussions for investors.

The strong July employment report may tempt investors to lean into bank stock relative performance weakness, under the assumption that signs of solid domestic growth will finally alter the interest rate structure in a positive fashion. However, before…

Typically when the Fed has begun to lift interest rates, overall credit growth is expanding at a rapid clip because banks have been increasingly lax in doling out credit. Consequently, any deterioration in credit quality can be offset by an expansion in…

The Chinese manufacturing sector has remained under downward pressure, but the stress level has alleviated compared to a few months ago. The Chinese labor market will likely continue to deteriorate, which will force policymakers to stay accommodative. Despite the recent rally, Chinese investable stocks remain exceptionally cheap.

Chinese banks have been writing off impaired loans, and the pace has quickened sharply in recent years. This has been largely ignored by investors. Under a rather extreme scenario, Chinese commercial banks' NPL ratio could reach 14%, which could lead to a 30% hit to banks' net equity base. Chinese banks H shares have already priced in this scenario.

The major banks are more willing to lend to the consumer and less willing to lend to the corporate sector.