Street Talk

A new bank technology firm, Neocova, is looking to chip away at the dominant market share of the legacy core system providers. The big three firms - Fiserv, Jack Henry and FIS – are the core providers for the majority of U.S. banks but Neocova and some others have emerged with new offerings. In the episode, Neocova CEO Sultan Meghji says his firm can help banks compete with larger institutions thr...

Attendees at Camp Kotok, a gathering of market participants every August in Maine, were focused on recent Federal Reserve actions, how U.S.-China relations will influence future decisions and the potential for modern monetary theory to become a regular part U.S. policy. In the episode, Katie Darden, director of FIG research at S&P Global Market Intelligence, discusses the event and shares intervie...

Bank stocks have fallen over the last 12 months as fears of a global economic slowdown and a flat-to-inverted yield curve weighed on the group. The selloff caused bank M&A activity to slow early in 2019 but transactions have rebounded. In the episode, KBW President and CEO Tom Michaud discusses investor sentiment toward banks, whether their fears are overblown as well as his thoughts on recent dea...

Bank branches are much less likely to be located in majority-black communities — even high-income ones — than other parts of the U.S, according to an investigation by S&P Global Market Intelligence. In the episode, Zach Fox, a senior reporter and author of the analysis, discusses how the disparity between majority-black neighborhoods and other areas has grown in recent years, what has driven the c...

FASB has proposed delaying implementation of a new reserve methodology, dubbed the current expected credit loss model, or CECL, for the vast majority of banks. The delay likely will prevent the new model from working as intended and allow institutions to build reserves well ahead of a downturn. In the episode, we highlight the number of banks impacted by the delay and include commentary from FASB...

Financial institutions might be wise to prepare for lower interest rates and potentially for a fairly long time. In the episode, Tony Crescenzi, market strategist at PIMCO, discusses the recent yield curve inversion and his expectation for rates to remain low for a long period of time and possibly even decline notably from current levels.

A few years ago, blockchain technology caught fire across the Street, with some market participants arguing that it would displace many traditional financial services. Those lofty expectations have come back to earth, but practical applications are beginning to surface, including from the nation's largest banks. In the episode, Tom Mason, fintech analyst at S&P Global Market Intelligence, discusse...

As the equity research business continues to face revenue headwinds, more firms could look to merge with pure play advisory shops. In the episode, George Kuznetsov, head of research and analytics at Coalition, which is owned by CRISIL under the S&P Global umbrella, discussed changes in i-banking league tables as well as the evolution of the equity research business and how it is only profitable fo...

Fintech companies and digital-only players have become a threat to traditional banks' retail deposit bases and they could soon turn their focus toward commercial customers. In the episode, experts from Promontory Interfinancial Network and Sandler O'Neill and executives from Goldman Sachs, Heritage Bank and Republic Bank discuss the growth of digital-only deposit platforms, how they have changed t...

Investment banking firm Hovde recently unveiled a new practice that will work with community and regional banks on asset/liability strategies and ways to utilize technology, including through fintech partnerships, to improve efficiency. Ray Chandonnet, a banking industry veteran and head of the new group, discussed his return to investment banking, different funding strategies banks can employ to...

Some fintech companies are making hay with digital platforms that tout their differences with banks, even though they are often offering virtually the same products. In the episode, we discuss with colleagues Rachel Stone and Kiah Haslett the deposit strategies employed by the likes of Chime, Aspiration and other incumbent players such as Ally Financial, Discover and Capital One. Those efforts con...

The days of large bank buyers pursuing deals to plant a flag in a new market might be gone with acquirers now seeing deals as a way to support investments in technology. BB&T touted that prospect when discussing its landmark merger of equals with SunTrust. In the episode, we spoke with S&P Global Market Intelligence colleagues Zach Fox and Joe Mantone about the drivers of BB&T/SunTrust merger, how...

The PG&E Corp. bankruptcy shows that financial backers of California utilities need to consider the risks associated with climate change but that exposure might be unique to entities operating in the state. In the episode, Regulatory Research Associates analysts Dan Lowrey and Dennis Sperduto discuss the next steps in PG&E's bankruptcy process, the future of its power purchase agreements and the r...

The competition for deposits is quite fierce and banks might even feel the greatest pressure when vying for large commercial customers. In the episode, Kelly Brown, CEO of American Deposit Management, a financial services firm that helps connect depositors with banks, talks about the competitive landscape and pricing in the market, while offering strategies to win new business. https://americandep...

Bank stocks just recorded their worst annual performance in seven years. Some analysts believe the selloff has left bank stocks undervalued, while others see few tailwinds to drive the group higher. In the episode, we highlight outlooks from Keefe Bruyette & Woods and Hovde Group analysts and make the case that investors looking for a port in the storm would be wise to back strong deposit franchis...

The recent selloff has put some banks on sale at a time when their deposits are only becoming worth more, according to Chris Marinac, co-founder and director of research at FIG Partners. The veteran analyst believes bank stocks have fallen too much over the last two months and he sees value in strong deposit franchises, some of which could receive healthy takeout offers at some point down the road...

Digital lenders have enjoyed explosive growth but no longer are seen as pure disruptors to the banking industry as partnerships with traditional lenders have grown. Nimayi Dixit, research analyst at S&P Global Market Intelligence, explains how digital lenders have been successful and why many of their models likely will continue to evolve into fee-based, technology providers for banks.

Several big banks have enjoyed early success in attracting new funds through national digital platforms and community banks should take notice as the battle for deposits heats up. The episode highlights the digital strategies employed by banks like Citizens Financial, PNC Financial and Goldman Sachs and features commentary from the management teams of those institutions.

Hurricane Maria caused close to $90 billion in damages in the Caribbean and took the lives of a nearly 3,000 people in Puerto Rico. The storm devastated telecommunications services and turned the island into a cash economy, making funds scarce for many banking customers. Lindsey White, who manages S&P Global's financial institutions' news team, visited Puerto Rico and spoke with bankers, regulator...

U.S. IPO activity rebounded in the second quarter while big-ticket deals continued to drive growth in M&A activity. Favorable conditions remain in place and could help 2018 close near record levels, according to Joe Mantone, senior editor at S&P Global Market Intelligence. Mantone said that all means good things for investment banks, which are expected to fly high on strong results this year.

The leveraged loan market has ballooned to record levels and the concentration of covenant-lite deals has grown in kind, leaving investors with less protection if loans move into default. Tim Cross, managing editor LCD news, and Marina Lukatsky, director of LCD research, discuss the current state of the market and why they aren't sounding an alarm yet.

Greg Hertrich, managing director and head of U.S. depository strategies at Nomura, believes deposit competition should intensify further as interest rates move higher and a handful of large banks roll out national deposit platforms. He discussed how other banks could follow the move and how higher rates are one of rising risk factors that could challenge credit quality.

KBW President and CEO Tom Michaud discussed the disconnect between banks' strong fundamental performance and investors' trepidation toward to the group. The Street has also reacted negatively to a handful of big-ticket bank deals, but Michaud believes large bank M&A activity will pick up.

Joe Fenech, head of equity research at Hovde Group, discussed current bank stock valuations, the growing importance of deposits in valuing franchises and the market's increased skepticism toward M&A, including transactions that appear favorable for the buyer.

Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, has changed the way the agency operates and reduced enforcement actions against banks. Now, Mulvaney is turning his attention to a powerful tool used by the agency called the civil investigative demand. S&P Global Market Intelligence colleague Brian Cheung discusses how the CFPB uses the tool and what changes could mea...