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Missy Dolski, Värde's Global Head of Capital Markets, spoke with American Banker about the growing importance of credit-linked notes, or synthetic risk transfers (SRTs), as banks look to offload risk. She notes that asset types that work well for both banks and investors have "low loss history and are high credit quality but carry very punitive risk weightings,” including capital call lines, revolving credit lines to investment grade corporations, prime auto loans and mortgage warehouse loans. Read the full article here: https://lnkd.in/eVB2ygHe

Important for surety companies to evaluate the stability of the banking relationship for their clients. Principals dependent on a single regional bank for their liquidity needs may be at risk if their line is reduced or withdrawn. https://lnkd.in/eWB37Rhk

Fidelity, GTCO and Access banks have set the ball rolling for capital raising from the Nigerian stock market to meet CBN's banking sector recapitalisation but there are worries... #cbn #fidelity #gtco #accessbank #bankrecapitalisation #stockmarket #capitalraising #theicir #shareholders #investors

6 BENEFITS OF USING BOND ORIGINATION It is a free service offered to clients across all major banks with no costs whatsoever to the client! Here are 6 Benefits of Using a Bond Originator! ✅It is EASY as the client will have someone to guide them through the process. ✅It is TIME SAVING as the application is submitted electronically & simultaneously to all banks. ✅An originator will assist the client with an overall assessment of their FINANCIAL SITUATION, CREDITWORTHINESS & AFFORDABILTY. ✅It increases the likelihood of obtaining a HOMELOAN due to the originators knowledge of the different banks lending criteria. ✅The multiple quote model enables originators to negotiate INTEREST RATES with banks depending on what other banks offered. ✅There is CONTROL & COORDINATION around the application process which also benefits the seller as this creates certainty. #Bondimage#Niceandeasyestates #BondOriginators #bondoriginatorssouthafrica #bondoriginatorsworkingforyou #Benefits #benefitsforyou

Deutsche Bank plans selling credit risk to investors through a deal known as significant risk transfer, Esteban Duarte reports, adding to a list of banks considering similar transactions that also includes UBS and Santander. SRTs are popular because they allow banks to get some capital relief in an era of rising requirements, not least ahead of a big capital package known as Basel that will likely kick in next year. The relief happens by exploiting situations where a spread exists between the risk weights imposed by regulators and the lower risk perception in the market. Put more simply, investors are willing to bear the risk at a lower compensation than what bank rules imply. That popularity pushed the overall volume of SRTs in the euro area to €153 billion last year. The Deutsche Bank transaction is particularly interesting because it's tied to a pool of about $2 billion in leveraged loans, according to Esteban's story. That comes after Sonia Sirletti, Esteban and Nicholas Comfort reported yesterday that the ECB is reviewing how banks give out leveraged loans, a type of credit that typically has elevated default probabilities as it goes to highly indebted companies, many of which are owned by private equity firms. Link here: https://lnkd.in/epNx79Bc

6 BENEFITS OF USING BOND ORIGINATION It is a free service offered to clients across all major banks with no costs whatsoever to the client! Here are 6 Benefits of Using a Bond Originator! ✅It is EASY as the client will have someone to guide them through the process. ✅It is TIME SAVING as the application is submitted electronically & simultaneously to all banks. ✅An originator will assist the client with an overall assessment of their FINANCIAL SITUATION, CREDITWORTHINESS & AFFORDABILTY. ✅It increases the likelihood of obtaining a HOMELOAN due to the originators knowledge of the different banks lending criteria. ✅The multiple quote model enables originators to negotiate INTEREST RATES with banks depending on what other banks offered. ✅There is CONTROL & COORDINATION around the application process which also benefits the seller as this creates certainty. #Bondimage#Niceandeasyestates #BondOriginators #bondoriginatorssouthafrica #bondoriginatorsworkingforyou #Benefits #benefitsforyou

What is Bank Runs? A bank run is a fast loss of deposits or other short-term financing by a financial institution, which causes it to fail from the lack of liquidity. While a traditional bank run has depositors queuing outside a retail bank branch, the concept of a bank run applies to many other situations. For example, mutual fund investors may decide to redeem their shares all at once, a hedge fund may find no lenders willing to roll over its repos, a conduit may find itself unable to sell short-term commercial paper to refinance the expiring obligations, and so on. Diamond and Dybvig (1983) explain why banks typically have liquidity mismatch in their balance sheets, and how this mismatch enables bank runs. The Diamond–Dybvig model assumes that risk-averse consumers look for investment opportunities but do not know in advance when they might need their money back. The investment projects of the production sector are illiquid in the sense that selling them early (before they mature) can only be done at a penalty.  The role of banks is to satisfy investor demand for liquidity by converting illiquid assets (loans to the production sector) into liquid liabilities (demand deposits). In this model, all banks are mutual banks (i.e., have no equity), and create liquidity just by pooling risks among its depositor-owners. A bank run occurs when a number of investors come to believe that many other investors are going to withdraw their funds (or, equivalently, deny refinancing). For example, suppose an (unbiased) rumor spreads on Wall Street that a certain bank finds it hard to obtain overnight loans. A bank that suddenly cannot roll over its overnight liabilities is likely to run out liquidity and default. There is an incentive to abandon the suspect bank as early as possible as the default would hurt those who provided the very last loans. Therefore, the rumor can scare all potential lenders away, and the bank can fail from a run by its counterparties in a self-fulfilling prophecy.

2 reasons why Axis Bank shares tanked 7% today; should you buy stock? Nuvama Institutional Equities said Axis Bank delivered in-line Q1 profit, but a miss on core income. The sequential rise in loan to deposit ratio (LDR) and a sharp increase in credit cost were key negatives, it said. Axis Bank shares plunged 7 per cent in Thursday's trade, taking its 5-day fall to 12 per cent. The fresh fall came as stress in unsecured segment and low recovery led to elevated credit cost for the private lender in the June quarter, even as top line and core operating performance were satisfactory, aided by stable margin and low opex growth. Analysts cut their FY25 earnings estimates for Axis Bank in 5-6 per cent range. They suggested targets in the range of Rs 1,175-1,550 on the stock. "The stress in unsecured does not seem to be contagious but the credit behavior of the portfolio will be key monitorable considering industry wide trend observed during the quarter under review," said PhillipCapital while suggesting a target price of Rs 1,460 on the stock. Nuvama Institutional Equities said Axis Bank delivered in-line Q1 profit, but a miss on core income. The sequential rise in loan to deposit ratio (LDR) and a sharp increase in credit cost were key negatives, it said.

A new private credit ecosystem is emerging across asset managers, banks, and insurers. Here’s what it means for the industry

Swiss Banks Charge Hefty Transfer Fees: Swiss bank customers are generally loyal and reluctant to switch. However, when a customer does decide to move to a new provider, it can be expensive. Banks often charge high transfer fees per portfolio position. #banks #custodyaccount