16 years of Mastercard vs Visa.
Both $MA (21.6%) and $V (20.9%) have remarkable CAGRs over that period. They have been pretty correlated throughout the period, taking over the world in unison. Source: Bloomberg, KoyfinCharts
European banks are apparently doing brilliant business in Russia…
In 2023, they paid 4 times more taxes to the Russian state than they did before the war in Ukraine... According to the FT, Deutsche Bank has increased its profits in Russia from €26mln before the war to €40mln in 2023, while Commerzbank has more than tripled its profits to €51mln. The German state holds a 15.8% stake in Commerzbank. Italian and Austrian banks are doing a killing as well… Western lenders have benefited from the imposition of sanctions on most of the Russian financial sector, which has denied access to the Swift international interbank payment system. That made international banks a financial lifeline between Moscow and the West. Source: FT, HolgerZ
The largest US banks are set to earn higher profits than expected this year
As the Federal Reserve looks likely to make only modest cuts to benchmark interest rates. Source: FT
Just as everyone forgot, banks continue to carry alarming amount of unrealized losses.
In Q4 2023, unrealized losses on investment securities for banks hit $478 BILLION. This compares to over $100 billion of unrealized GAINS seen in 2020 when the Fed started cutting interest rates. Meanwhile, the Bank Term Funding Program has officially expired. This was the emergency loan program established during the regional bank crisis. Who will step in now? Source: The Kobeissi Letter
us bank deposits have stabilized and risen since the 2023 banking panic, showing that confidence is slowly returning.
Source: BofA, Markets & Mayhem
Major U.S. Banks, by Commercial Real Estate Exposure
This graphic shows the 20 largest U.S. banks by assets, and their exposure to commercial real estate as a percentage of total loans. source : visualcapitalist
Regional banks don't look great compared to both large-caps and small-caps
source : all star chart
New York Community Bank $NYCB crashed 20% in after hours trading citing "material weakness in internal controls."
The weakness is reportedly related to loan review resulting from ineffective oversight and risk assessment. NYCB is the same bank that acquired the collapse Signature Bank during the regional bank crisis. This comes just weeks after the bank posted an unexpected $260 million loss in Q4 2023. The stock is now at its lowest level since 1997. Source: The Kobeissi Letter
