Category Archive for "Financial"

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The Collateral Plays on EMV – FIS, VNTV, NCR, NXPI

“It is very clear that card issuers like Capital One need to have our US customer base by the latter part of 2015 on a chip basis ….. but I have a feeling by the time we have all invested

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Quick Thoughts: The Signal from the Rate-Markets on 2015 Margin-Lift for Large Banks is Deafening

With 6-month Libor (6ML) at just over 30 basis points, the deposit franchises of US Commercial banks are contributing next-to-nothing to net interest margins; specifically, we estimate deposit franchises contributed less than 10 basis points to aggregate net interest margins

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Quick Note – Barclays: Dark Pool Allegations Shocking, but Stock Trades with Substantial Margin of Safety

The NY AG’s complaint against Barclays around alleged fraud and deceit in the operation and marketing of its dark pool is shocking, and the 5% decline in the stock price since the filing shaves GBP2bn of market cap. The central

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The Role of Branch Networks and Information Scale in the Coming Deposit Re-price Cycle

“The customer who likes to visit a branch is less price sensitive than a customer whose relationship is online-only. Banks haven’t fully understood that if I have a branch in this neighborhood, it reduces price sensitivity[1].” Frank Rohde, CEO of

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Mobile Wallets: The Battle for Control of Point-of-Sale and Opportunity for FIS

Amazon’s announcement of the Fire ‘phone yesterday, along with the launch last October of pay-with-Amazon (allowing customers to use their Amazon credentials to pay on other e-commerce sites), raises the possibility of an Amazon wallet leveraging the firm’s 250mm cards-on-file

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Quick Thoughts – Early iBeacon Trials are Encouraging for Apple

Digital wallet-provider LevelUp reports that mobile payments volume increased 22% over 30 days at the 50 merchants where it installed iBeacon. As discussed in our May 30th note, “Apple vs. Banks in Mobile Payments: Update”, the focus of iBeacon is

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ADS, AXP and JPM: The Bank Edge over Online Advertising and Payments Platforms

There is a secular shift in advertising from generic brand advertising on broadcast channels to data-enabled direct marketing on digital channels. Our colleague, Paul Sagawa, reported on the shift in a research note of June 9th titled “The Revolution in

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Quick Thoughts: JPM – Cyclical Improvement in NIM and FICC will Lever over Flat-to-Down Expenses for a 2015 EPS Beat

JPM’s economic model is to sustain a tangible ROE of 15-16% despite lifting the CET1 ratio (to 10-10.5% from the current 9.6%) by levering higher net interest income over flat-to-down expenses (for a 55% efficiency ratio vs. 59% in 2013);

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The Shift from Signature Debit and Prospect for a Bank-Owned PIN Debit Network

The debit business in the US is unsustainable. Durbin-regulated banks are losing money on signature debit as the swipe fee has fallen to 24 cents/transaction (from a pre-Durbin 59 cents) vs. Fed estimates for fraud and processing costs at 30

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Impact of European Monetary Policy on Bank Margins in the US

European monetary policy matters to bank net interest margins in the US because the risk of disinflation has collapsed European bond yields (to 1.6% on the 10-year from 2.2% at end-2013) dragging down US Treasury yields (to 2.6% on the

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