Claimo’s Post

It's interesting that even bank executives are beginning to say the quiet bit out loud – there is rampant profiteering by the Australian banks: "Banks are seeing all the hallmarks of financial stress - overdrafts are up, credit card debt has swelled, thousands of customers are showing signs of financial hardship, some are defaulting on their mortgages. And yet banks are still making record profits. The sector made $7.21 billion last year after tax." As the Commerce Commission notes in its market study into personal banking, all of the Australian banks increased their margins by around 25% in the last three years - in the middle of a cost of living crisis. This isn't banking, it's looting. So it's time for wide-ranging reform of our dysfunctional banking sector: structural separation of the Australian banks, and the levying of a windfall tax on the banks that are causing so much harm to our economy. https://lnkd.in/ggXrJ69f

As the looming rate cut nears, banks and credit unions are holding steadfast in offering competitive APYs in their high yield savings accounts. Our Chief Financial Officer and advisor Kevin Manning advises that now may be the ideal time for investors reassess banking relationships and capitalize on the competitive rates, ensuring long-term yields: “Newer banks, who are trying to build up a strong base of account holders, are willing to pay higher rates to entice them to move their accounts from other lower paying competitors,” says Manning. However, risk of default in these banks could be slightly higher, so with that in mind it is advisable to keep account balances at or below your FDIC protection limits. Read Andrew Shilling MarketWatch article for further insight from Kevin and other industry experts when it comes to navigating high-yield savings accounts. https://lnkd.in/g_kBupJa

Think that all of your FDIC deposits are safe and good? Do you know how much money is held by the FDIC to protect that first $250k for all depositors? Drumroll please…Well, it is ONLY 1.17% of ALL of those deposits that are currently FDIC insured deposits, with the current funding. And, that is even below the 1.35% target! Here is the excerpt from that attached link announcement: "The reserve ratio, or the ‘fund balance’ relative to insured deposits, increased by two basis points to 1.17 percent. The reserve ratio currently remains on track to reach the 1.35 percent minimum reserve ratio by the statutory deadline of September 30, 2028." https://lnkd.in/ggcQizCU What if a domino, or two, starts to fall (like it did with SVB and Signature)…guess where all that bailout money will come from? Shocker, it will again be from taxpayers and money printing. The fallout result can only be a combination of the following: More inflation and higher prices, devaluation of the dollar (money printing), increased taxes, or, all of the above. It’s all pretty scary when you start reading the FINE PRINT, so hold on! #fdic #usbanking #fed #tax #inflation

Best savings accounts of the week: Savers urged to 'carefully consider' interest rates of up to 5.28%: Savings interest rates continue to be relatively high and experts have been highlighting some competitive accounts from challenger banks.

Banks saw a big uptick in net income in Q1 '24 after depressed earnings the previous quarter, but the agency is watching signs of stress in the commercial real estate market and elsewhere - according to the Federal Deposit Insurance Corporation (FDIC)'s latest Quarterly Banking Profile. #FDIC #QBP #Gruenberg #banking

Today, the FDIC insures 4,559 banking institutions in the USA. The total amount of insured deposits is approximately $9.2 Trillion. The total amount of the Deposit Insurance Fund is $121.8 Billion. In the 2008 financial crisis, the total amount of government bailouts was $124 Billion. If there is a run on the banks in this cycle, is $121 Billion big enough? Probably not. The bubble of delayed refinancing commonly referred to as "extend and pretend" continues to build and makes the ultimate fallout quicker and more lethal when it happens. Regulators are looking the other way. Who has the power to do this? The Office of the Comptroller of the Currency (OCC) regulates the banks and reports to the US Treasury. Somehow, it feels like the Treasury wants to delay any financial upheaval until after November 5th. The goal - don't make the depositors nervous. Is this possible? Why would anyone do this? Who benefits? Don't think too hard on this one. Read this article and let me know what you think.

The bank earring season is upon us and we are seeing mixed signals on how major banks weather the CRE storm and high interest rate environment in 2024. 1. M&T Bank income was down 25% in the 1st quarter impacted by a. Customer deposit retention high costs, o prevent customers from fleeing to higher-yielding alternatives b. Allocation for SVB FDIC failure expense c. CRE loan exposure set aside $200 million as provisions for CRE credit losses Last month, ratings agency S&P Global downgraded its outlook on five U.S. regional banks including M&T Bank to "negative" from "stable" due to the possibility of CRE market stress hurting their asset quality. 2. PNC Financial Services Group Inc. missed estimates, Wells Fargo & Co. and JPMorgan Chase & Co., which both reported net interest income that missed analyst estimates. These banks all adjusted the net income for 2024 down by 5% at minimum. 3. Bank of America's Q1 profits fall 18% on higher expenses and charge-offs a. BofA had to make a one-time $700 million payment to the Federal Deposit Insurance Corp. to help the agency replenish the deposit insurance fund. b. Bond portfolio and CRE book fell during the Q1. 4. The bright spot is investment banking, for Bank of America -Investment banking was one strong point for the bank this quarter, with global investment banking fees up 35% in the quarter. 5. Goldman Sachs was a star of the pack where The bank said profit jumped 28% to $4.13 billion, Investment banking fees surged 32% to $2.08 billion, topping the estimate by roughly $300 million, driven by higher debt and equity underwriting. This paints a picture of struggling regional banks, prospering investment banking and environment for more bank distress buying and consolidation.

Late last year, the FDIC was seeking $16.3 billion through a special assessment banks would pay to replenish the money it used to guarantee the deposits of customers of two banks that failed in March 2023. Last month, the regulator revised that sum upward to $20.4 billion. That means many banks will see a big bump up in noninterest expenses in Q1. Here's how much PNC expects to incur. https://lnkd.in/e-z4aZEz

In 2006-2008, the #FDIC established both a temporary and final rule to pay dividends to banks when the Deposit Insurance Fund exceeded 1.35% of total insured deposits, with higher dividends when the fund exceeded 1.5%. Then, post financial crisis and #doddfrank reform, the FDIC determined progressively lower assessment rates would be less volatile and suspended dividends indefinitely. While the statutory minimum (1.35% of insured deposits) may be met ahead of the eight year mandate, the designated reserve ratio remains 2%. The #FDIC staff reiterated that 2% should be viewed as a minimum long-range goal, rather than a cap for the fund, in the most recent memorandum. The systemic risk determination and coverage of uninsured deposits in 2023 was recouped via special assessment and did not impact the DIF balance, though congressional research suggests there may be #toobigtofail and #moralhazard externalities. When factoring in incremental consideration of the $7 trillion of industry uninsured deposits and the potential for similar future determination (or "itchy trigger fingers" mentioned in the report), the 2% target looks more like a 1.2%, especially to banks that just made their second special assessment payment. Based on the most favorable projections, considering sustained assessment rates, stable insured deposits and losses consistent with current projections, the earliest the Fund may hit 2% would be later in 2030, potentially 2033 or 2034. At this point, the DIF would be almost $213 billion, approximately the asset size of the 22nd largest bank holding company.🌿🏦 #bankingindustry #depositinsurance #deposits