Tag Archives: Banks

The OCC conducted a survey of 95 banks. What are some of the trends the survey revealed about underwriting standards?

Mike Weinbach has been with the bank for 12 years, during which time he has served in many roles.

The investigation conducted by the two lawmakers found that repealing Section 716 of Dodd-Frank allows banks to keep nearly $10 trillion in swaps trades on the books that would be “pushed out” to entities that are not insured with taxpayer funds, if not for the Dodd-Frank rollback. Section 716 was intended to prevent taxpayer bailouts of federally-insured banks with risky swap holdings.

The authors noted that the typical scenario for economic downturns is for the number of problem loans to rise, along with loan-loss provisions. During the financial crisis of 2008 and 2009, commonly known as the Great Recession, net charge-offs totaled more than $50 billion, a historically high level. Meanwhile, the provisions for loan and lease losses more than tripled from 2007 to 2008 at the onset of the recession—from less than $20 billion to more than $70 billion in just a year.

Should banks actually be allowed to fail? Well, the “big, dumb” ones should, according to JPMorgan Chase chairman and CEO Jamie Dimon, who on Wednesday blasted the institutionalized belief that mega-dollar bailouts for badly run banks is good for the economy.

In the last 18 months, however, banks have generally become profitable as economic conditions have improved, unemployment is down, and loan demand has increased, leading Curry to ask: “Where do we go from here? What will it take to ensure that banks remain solvent, stable, and secure in their role in the payments and credit system?”

While waiting for the Fed to raise rates, banks will likely place "additional focus on cost controls to improve operating efficiencies and extend balance sheet duration" to reduce margin compression, according to a recent report from Fitch Ratings. Bank margins have fallen to 3.02 percent as of the first quarter of 2015, the lowest average since 1984, the Federal Deposit Insurance Corporation said.

SunTrust and Comerica earned mixed reviews after reporting year-over-year profit declines in the third quarter, according to the banks' earnings statements released Friday.

Citigroup reported $4.3 billion in net income for the third quarter, or $1.35 per diluted share, up 53 percent from $2.8 billion, or $0.88 per share, in the same quarter a year ago. The bank also has revenues that reached $18.7 billion, down from $19.7 billion last year.

Loss severities on loans serviced by banks were reported to be more than 10 percent higher than loss severities on non-bank serviced loans in those three states, which accounted for 42 percent of all subprime loans in foreclosure in private-label residential mortgage-backed securities.