U.S. banks’ fourth-quarter 2023 earnings demonstrated continued pressure on funding costs and minimal slippage in credit quality. The Street largely took the results in stride, but management teams were hopeful that net interest margin pressure could subside in the second half of 2024 and credit quality would hold up in the face of a higher for longer rate environment, according to Gerard Cassidy, co-head of global financials research at RBC Capital Markets. In the episode, the veteran analyst said he shares that optimistic outlook and believes the current environment is more similar to 1995 when the U.S. economy digested sharp rate hikes by the Federal Reserve and likely will not result in a severe downturn like some investors fear. Cassidy believes bank stocks are a show me story but does see further catalysts on the horizon. The analyst also offered his outlook for bank M&A activity.
Ep. 126 - Hunting the bears, making the bull case for CRE
Ep. 125 - Tales from Top Perfomers: Five Star Bancorp CEO
Ep. 124 - KBW CEO challenges investors painting banks with broad brush
Ep. 123 - Bank regulators are tipping the scales, could push even harder
Ep. 121 - Lessons learned from a tumultuous '23, potential read through to '24
Ep. 120 - Investor sees legs in US bank stock rally amid reasonably priced M&A
Ep. 119 - Unlocking keys to balance sheet restructurings, bank M&A
Ep. 118 - PE looking to fill community banks' capital need created by higher for longer rates
Ep. 117 - Banks face slow-cession, credit slippage as PE waits in the wings
Ep. 116 - Early remediation, not Basel III endgame, the answer to avoid repeat of spring 2023 bank failures
Ep. 115 - Unpacking the largest bank deal in ’23, private equity involvement in bankland
Ep. 114 - Regional banks feel funding pressures, but second-quarter earnings target biggest bears
Ep. 113 - Bank investors can find diamonds in the rough amid funding pressures
Ep. 112 - Banks face Bob Ross effect, tougher exams but ‘huge’ M&A on horizon
Ep. 111 - Bearish bank investor turns bullish
Ep. 110 - Bears use banks as ‘weapons of destruction' to force change in Fed policy
Ep. 109 - Liquidity crunch leaves some trophy franchises on sale - KBW CEO
Ep. 108 - Weighing Fed rate hikes against banks' liquidity crunch
Ep. 107 - Lessons learned from a modern day bank run
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