March 24, 2025 | Premium Service | In the this issue of The Institutional Risk Analyst, we update readers of our Premium Service on the top seven US depositories – JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), U.S. Bancorp (USB), Bank of America (BAC), PNC Financial (PNC) and Truist Financial (TFC).
Please note that the next live conference call for our Annual Plan subscribers with WGA Chairman Christopher Whalen will be held on April 4, 2025. We'll be attending the annual event sponsored by Fay Servicing in Tampa this week and will report on the highlights of this important mortgage industry conference in a future issue. And don't forget every Monday at ~ 9:10 AM ET we speak with Janet Alvarez on "The Business Briefing," on Channel 132 SiriusXM Radio!
The WGA Bank Top Index and the Invesco KBW Bank ETF (KBWB) bottomed briefly a week ago, but as discussed in our last comment (“Trump, Powell and the Banks”), there is little visibility on the economy, but growing visibility on rising credit expenses. We wrote:
"The biggest negative factor for banks is the lack of visibility on the economy. There were a number of important comments in the press conference this week by Fed Chairman Powell, but the key point for banks and all financials is that the level of uncertainty about the direction of the economy is so high that the Fed is essentially prepared to go in either direction."
We tell the consulting clients of WGA there is at least 20-30 percent forbearance in most industry credit default and loss severity data. This is why that colorful chart of key credit metrics showing the rising cost of forbearance in our last comment is so important to investors and risk analysts. When lenders are refusing to take over security on defaulted mortgage loans because of the expense of running moribund commercial properties, that suggests that the market for those assets is dysfunctional.
Wells Fargo