Call me crazy - I want to buy banks!

ljyoung · Feb 25, 2009

Quote from Brendan R:

soon you will be able to buy A bank, anyway if you're in the US or the UK I guess you're already long banks through your forward taxation. Good luck
More...

If you were speaking to me Brendan R, I wouldn't touch a bank stock primarily because I am not someone who is interested in equities. There are those who are and the OP suggested that although the big banks were rather toxic, there were smaller banks and/or banks that thought 'smaller' that might be worth a play - a long play if I understood him correctly. I think that's all he was saying.

lj

ShoeshineBoy · Feb 25, 2009

Quote from ljyoung:

This is an article from the folks at Risk Center which some of you might find of interest:

February 25: Industry Risk - Amid Crisis, a Select Group of Banks Improve their Standing with Large Companies

--------------------------------------------------------------------------------
Location: New York
Author: Jeanine Canneto
Date: Wednesday, February 25, 2009
--------------------------------------------------------------------------------

The results of the most recent Greenwich Associates survey reveal that companies around the world are looking to a few select banks, including regional, national and local banks, to supplement credit and other services previously obtained from now-troubled financial institutions.

Greenwich Associates asked the 638 companies participating in the survey to name the banks with which they do business with or know well and to assess how their banksâ handling of market turmoil over the past six months has affected their reputations. Companies were also asked how recent market events and the performance of the banks they use will affect the amount of business they expect to do with individual banks over the next six months on an overall basis, and in capital markets and cash management specifically.

âOur research findings suggest that the number of banks that have benefited most from government guarantees and capitalizations will see the most meaningful reductions in business,â says Greenwich Associates consultant John Colon. âCompanies are wary of over-dependence on these banks, and the banks themselves are rebuilding balance sheets and trying to avoid loan losses. These conditions are hardly conducive to the rapid increase in lending hoped for by regulators and politicians. Over the near term, several banks that are in position to significantly increase lending are local and regional banks that have managed their balance sheets conservatively. These banks have a unique opportunity to gain market share and assume a larger role in corporate credit markets.â

In fact, the shift in corporate banking business from global to local providers appears to be intensifying as the worldâs biggest financial firms face new political pressures that make international lending more difficult. âMost of the big banks in the United States and the United Kingdom have accepted capital from government bailout programs and they are now under intense pressure to step up lending at home,â says Greenwich Associates consultant Robert Statius-Muller. âRight now, there is little incentive for these banks to extend credit to companies outside of their home markets and it is becoming increasingly hard to operate as an international bank.â

United States

At the top of the very short list of banks that have burnished their reputations among corporate clients in the United States as a result of their handling of the financial crisis are U.S. Bancorp and PNC Bank â regional banks that have not experienced write-downs of the magnitude that brought many larger institutions to their knees. As a result, corporate clients expect to increase the amount of business they do with both banks on an overall basis and in cash management in particular. Also poised to pick up new business in coming months from companies in the United States are J.P. Morgan, which still stands as one of the few banks that has improved its standing among its corporate clients as a results of its actions during the credit crisis, Wells Fargo/Wachovia and a handful of foreign banks including Deutsche Bank, Scotia Capital, Bank of Tokyo-Mitsubishi UFJ, and HSBC are also expected to see an increase in business from large U.S. companies.

Europe

Nowhere has the reputation of the banking industry as a whole suffered more among large companies than in Europe. Every major bank competing in the region saw its reputation take a hit among corporate clients over the last six months, with two exceptions: Nordea and Banco Santander. The performance of these two banks illustrates the progress made by regional banks that avoided the worst of the global credit crisis while larger competitors struggled. Also in this camp are banks like BBVA and Svenska Handelsbanken, whose reputations among corporate clients have held up much better than those of most pan-European and global banks. While significant proportions of the corporate clients of global and pan-European banks say they will reduce the amount of business they do with these institutions in the next six months, companies on a net basis say they expect to increase the amount of business they do with the likes of Nordea, SEB, BBVA, Svenska Handelsbanken, Banco Santander, Danske Bank, and other smaller European banks. The survey results reveal that many of these banks can expect to increase their share of client âwalletâ in capital markets and cash management.

BNP Paribas and HSBC are the expected beneficiaries among the larger global banks in the eyes of corporate clients, despite some minor losses in reputation associated with the ongoing financial crisis. Existing clients say they expect to increase the amount of business they plan to do with both banks over the next six months.

Asia

In Asia, the list of banks that have seen their reputations improve among corporate clients amid the volatility of the past six months includes the State Bank of India and Indiaâs HFDC.

Chinese banksâ reputation appears mostly unaffected by the crisis. Among the regionâs larger corporate banks, only Standard Chartered improved its reputation among companies over the period. By gaining the respect of clients in these difficult conditions, these banks appear to have positioned themselves to increase their market share.

Forty percent of companies that are clients of OCBC say they expect to increase the amount of business they do with the bank in the next six months â as do 36% of corporate clients of the State Bank of India and 27% of the clients of HFDC. Japanese banks such as Bank of Tokyo Mitsubishi UFJ and Mizuho Corporate Bank also are likely beneficiaries of the shift in bank relationships.

lj
More...

Useful post - thx.

limitdown · Feb 25, 2009

ok,

crazy!

Quote from timscott:

C screwed, BAC probably, COF dead.

But amidst the maimed and dead there have to be survivors that will benefit from this mess.

And at this point it looks like ALL banks have been thrown out. The proverbial baby with the bath water.

I don't like the monster big banks.

I like BBT MTB TD PNC USB, buying a bit in each. Not calling a bottom, just dipping a toe.

PNC has much less exposure to toxic assets / didn't get involved with as many bad loans because housing in their servicing area did not go as nuts.

TD - Canada same thing - housing bubble did not balloon as much. Growing deposits.

MTB - took very little TARP, I think they were asked to take it. Growing deposits because they are viewed as healthy, profitable last Q.

USB - unjustly punished, they picked up all the GOOD assets on their last acquisition and none of the bad, did not over pay.

If you know something I don't on the above (big red flags) = please post.

You have any picks - lets see em.
More...

myoffices · Feb 25, 2009

I think we are starting to see a bit of short covering here. I would be long 10000 shares of C here for a quick trade intraday.

you can get 10% easy of this one several times the momentum is crazy. What a rush.

BAC has more writedowns coming following AIG. This should be their worst quarter coming up here. I think tomorrow we trade higher. I think the deals are already done and the govt will make some huge profits so Im trading right along side them.

Citi will eat up so many banks it will be like playing Pac Man--(I am showing my age) BAC above 6 is a good trade due to program buying. Using a stop loss right there might help.

My book is almost done...

piezoe · Feb 25, 2009

I like UCBH for the reasons i stated under the stocks thread with that name. I won't repeat but just hit the highlights. They are being hurt by their bad california commercial loans. Further write downs on the way. That said, i like them because they are no longer just a California bank, they are in Atlanta, New Jersey, New York, Houston, etc. And they are in Hong Cong and are licensed in China! They have a Chinese partner bank , Minseng, that is in a position to supply capitol if needed, and so far they are still on the well capitalized list. I believe UCBH has the potential to become the number one bank for US Chinese Commerce. The bank is still thought of by many as a California bank. As a result the stock is being given away at something under two dollars or about 1/12 of book. I have followed them closely and listened to all the conference calls. Nothing i have learned so far has changed my view of the banks long term prospects. But be prepared fr a long wait if you go in now.

Quote from timscott:

C screwed, BAC probably, COF dead.

But amidst the maimed and dead there have to be survivors that will benefit from this mess.

And at this point it looks like ALL banks have been thrown out. The proverbial baby with the bath water.

I don't like the monster big banks.

I like BBT MTB TD PNC USB, buying a bit in each. Not calling a bottom, just dipping a toe.

PNC has much less exposure to toxic assets / didn't get involved with as many bad loans because housing in their servicing area did not go as nuts.

TD - Canada same thing - housing bubble did not balloon as much. Growing deposits.

MTB - took very little TARP, I think they were asked to take it. Growing deposits because they are viewed as healthy, profitable last Q.

USB - unjustly punished, they picked up all the GOOD assets on their last acquisition and none of the bad, did not over pay.

If you know something I don't on the above (big red flags) = please post.

You have any picks - lets see em.
More...

BigFunky · Feb 25, 2009

You should have a look at the Australian banks - they weren't hit so hard by the credit crunch. In fact they are successfully raising new capital.

- Commonwealth Bank on the ASX, and Westpac on ASX, also listed as WBK on the NYSE.

sumosam · Feb 25, 2009

Aussie banks are good....but Canadian banks are GREAT!! ok, SO i'm not Tony the Tiger....showing my age.

Our interest rates have always been lower, and, we were not nearly in as much of a housing bubble (I guess people don't care for a holiday home in Canada). RY, BMO are interlisted.

We actually have the strongest banks in the world. With gold now going down, these banks should lead the way up.

Illum · Feb 25, 2009

Quote from timscott:

TD - Canada same thing - housing bubble did not balloon as much. Growing deposits.

More...

TD sprouting up here in Jersey, taking advantage. Im not sure how much they are spreading, I haven't bothered to look into it. Personally Im not getting long banks until Eastern Europe sorts itself out. Could spread like a virus. But if you are looking for winners, they appear to be winning around here

Chagi · Feb 25, 2009

Quote from sumosam:

Aussie banks are good....but Canadian banks are GREAT!! ok, SO i'm not Tony the Tiger....showing my age.

Our interest rates have always been lower, and, we were not nearly in as much of a housing bubble (I guess people don't care for a holiday home in Canada). RY, BMO are interlisted.

We actually have the strongest banks in the world. With gold now going down, these banks should lead the way up.
More...

I agree that Canadian banks look relatively good right now compared to historical prices, but their current stock prices, trend and yields tell a different story. I think it would be a very good idea to wait before investing, I suspect that things are about to look substantially worse very soon.

rock34748 · Feb 25, 2009

Quote from rock34748:

STI at 6.99 a share. Like you just in a toe as they do have some bad stuff not fully exposed yet. I've seen them described as wounded but not likley to be zombies or socialized. Bigger local bank that prides themselves in safety, primarily Florida. We'll see.

I also averaged in UYG mid afternoon Friday, 1.99ish More nervous about this one though because of non-specific wide exposure and just ETF concerns in general. The next big guy to fall to nationalization could drop this one quick, but good strong solution news could rise it nearly as quick.

BAC was the easiest trade though (not investment.) Options expiration Fri, buy mid afternoon sell late afternoon.

Good trading.
More...

Out of STI at 11.02... now it will go to 20 but who cares. Took half off my UYG at 2.45. Not investing... just trading.