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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FINANCIALS
Banks; idiosyncratic or systemic? We’ve had three meaningfully negative pieces of news from banks globally in the last few days:
- NYC Bancorp (NYCB US) posted poor results with a big uptick in credit losses. However, this was due to new rules the bank had to follow (as it had crossed the USD100bn asset size threshold for monitoring statuses) alongside two (just two) corporate credit losses. The equity value nearly halved (see graphic).
- Aozora in Japan (8304 JP) posted a surprise loss for 3Q24 (3M to Dec-23) on US office loans. It has taken a “hair shirt” approach to provisioning here but it still begs the question of why, for example, it had nearly a quarter of the loan book outside of its core, home market. Equity has been similarly punished (graphic).
- Julius Baer (BAER SW) defenestrated its CEO in the wake of bumper losses, largely tied to Signa, the bust Austrian CRE firm and the Benko business empire. It had said in Nov-23 it would lose c.CHF70m – this week that turned into CHF586m. The benefit of having a stabilising wealth business underpinned the equity (graphic).
What do these all have in common? Concentration risk and commercial real estate – these are hardly new risks to most prudent managers but history does have a habit of repeating itself. If US rate cut expectations are now being tempered, we cannot discount more risk situations. At this stage, problems do not appear systemic, however.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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