Displaying items by tag: banks

According to an analysis of patent filings, compiled by GlobalData, there is a shrinking number of cybersecurity-related applications in the banking industry over the past three months, compared to the previous year. The most recent filings show that the number of related patent applications in the banking industry was 596 in the three months ending July. This is down from 1096 during the same period last year. This indicates cybersecurity innovation in the retail banking industry is dropping off. Capital One Financial was the top innovator in the banking sector in the latest quarter. The company filed 125 related patents in the three months ending July, down from 230 in the same period last. Visa was second with 109 patent applications. One company that has increased research is Truist Financial, which saw a 35.7% growth in related patent applications in the three months ending in July.

Finsum:While cyber crimes are on the rise, cybersecurity innovation in the banking industry is falling.

The latest data from MSCI Inc. regarding the environmental social and governance criteria gave updates to America’s largest Financial companies like Wells Fargo, Citigroup, and Morgan Stanley. However, some are accusing rating agencies of ‘greenwashing’ the criteria because these same companies lent a combined $74 billion to fossil-fuel companies. This is the exact reason the SEC is looking to step into ESG ratings in one of their latest announcements. In fact, only 3 lenders in the S&P 500 received ESG rating downgrades. This is mostly because MSCI only considers the fraction of loans to polluters, not their total value.

FINSUM: Total existing outward loans might just be a way the SEC could come down on future ESG rating regulation if these stories gather more headlines.

(New York)

At the onset of the pandemic, the Fed and treasury tied up stock buybacks as part of a regulatory measure coupled to the…see the full story on our partner Magnifi’s site.

(New York)

The better the economy gets, the more banks seem like a good buy. Banks have been rather severely beaten up over the last several months, largely missing on the price recovery of so many other stocks. This is primarily because of two factors—ultra-low interest rates, and the potential for losses on their loan portfolios. However, it is increasingly appearing like loan losses may not be nearly so severe as forecast, and that billions of Dollars set aside to account for such losses may now be released onto earnings over the next couple of quarters.

FINSUM: Two considerations here. Firstly, the idea of loan losses flowing back to the bottom line and causing upside surprises at earnings time sounds great, especially within the longer-term perspective that banks are a good macro bet on the recovery. The downside risk here relates to an article yesterday in BuzzFeed that accused banks (using obtained data on potential fraudulent activity in client accounts) of not following regulations related to money laundering. That could obviously turn into a big mess, but as yet it is unclear if that is a material risk.

(New York)

Banks have been absolutely hammered since COVID erupted, and they have not come back very much at all. Overall they are down 33% on the year versus a 5% gain for the S&P 500. Worries about loan losses and low interest rates headline the set of fears for the banking sector. However, banks may have an ace in the hole. Early in the year they set aside tens of billions for loan losses—which hurt earnings, but that may now be their good fortune. Loan losses have not been as bad as expected and many suspect that banks may start to let some of those loss provisions flow through to the bottom line in the next couple earnings seasons.

FINSUM: In our view, this would be a double whammy to the upside for the sector. Not only would it result in blowout earnings, but it would officially alleviate a big fear—that loan losses are going to be very bad because of COVID. Altogether seems like a good opportunity.