FBR Capital on Financial Institutions - Intererchange: Clear Skies Ahead? Durbin Decided, Final Fed Rule Coming
Tweet
Share
E-mailGet Alerts V Hot Sheet
Price: $368.16 +0.72%
Rating Summary:
45 Buy, 6 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 12 | New: 19
Rating Summary:
45 Buy, 6 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 12 | New: 19
Join SI Premium – FREE
FBR Capital on Financial Institutions: Financial Policy - Intererchange: Clear Skies Ahead? Durbin Decided, Final Fed Rule Coming
FBR analyst said, "With the Tester bill defeated, we believe the resultant sell-off of Visa (NYSE: V)(Outperform) and MasterCard (NYSE: MA)(Outperform) represents a buying opportunity, given our belief that the final Fed rules, which should be issued in the next two weeks, will be in line, and potentially slightly less onerous, than the initial draft. Specifically, we believe the upper end of the interchange fee cap could be increased to $0.20 from the proposed $0.12, and with respect to the elimination of exclusivity, we expect alternative A (multiple networks only for PIN transactions) to be chosen. As for banks, the defeat of Tester and resultant implementation of interchange fee caps is just one of a litany of headwinds facing the sector, and therefore does not change our EPS estimates or investment outlook. We have included an updated table ranking the banks in our coverage universe that derive the greatest percentage of revenue from interchange—TCF Financial (NYSE: TCB)(Market Perform), Regions Financial (NYSE: RF)(Market Perform), and People's United Financial (Nasdaq: PBCT)(Market Perform)."
FBR analyst said, "With the Tester bill defeated, we believe the resultant sell-off of Visa (NYSE: V)(Outperform) and MasterCard (NYSE: MA)(Outperform) represents a buying opportunity, given our belief that the final Fed rules, which should be issued in the next two weeks, will be in line, and potentially slightly less onerous, than the initial draft. Specifically, we believe the upper end of the interchange fee cap could be increased to $0.20 from the proposed $0.12, and with respect to the elimination of exclusivity, we expect alternative A (multiple networks only for PIN transactions) to be chosen. As for banks, the defeat of Tester and resultant implementation of interchange fee caps is just one of a litany of headwinds facing the sector, and therefore does not change our EPS estimates or investment outlook. We have included an updated table ranking the banks in our coverage universe that derive the greatest percentage of revenue from interchange—TCF Financial (NYSE: TCB)(Market Perform), Regions Financial (NYSE: RF)(Market Perform), and People's United Financial (Nasdaq: PBCT)(Market Perform)."
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Jefferies Downgrades IDP Education (IEL:AU) (IDPUF) to Hold
- Deutsche Bank Starts Ardagh Metal Packaging S.A. (AMBP) at Hold
- Jefferies Downgrades Sunway Healthcare Holdings (SUNMED:MK) to Hold
Create E-mail Alert Related Categories
Analyst CommentsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
