Nomura Securities on Trust Banks: 2Q12 Wrap - Not Bad, Considering Current Envirornment
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Price: $187.13 +2.22%
Rating Summary:
15 Buy, 14 Hold, 1 Sell
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
15 Buy, 14 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Nomura Securities on Trust Banks: 2Q12 Wrap.
Analyst, Glenn Schorr, said, "Not a bad quarter considering the environment as TB earnings hung in there thanks to reasonably stable AUM/AUC, fees that actually rose and there was definitely more NIM/NII stability than feared. That said, we see revenue headwinds persisting (including some seasonal pressures in 3Q) and continue to feel the stocks will be range-bound in the interim. The seasonal uptick in sec lending was a tailwind to the top line this quarter (+37% q/q on average). Lower markets held AUC/AUM down (-1% and -2%), on a sequential basis, but related fees held up, increasing 3%, and 9%, respectively. Following the Fed’s recently released NPR, trust banks revised their estimated B3 T1C ratios this quarter, but with differing implications. The group is relatively inexpensive, and there is lots of capital, but ROEs remain low. We are maintaining our Neutral view on the sector given our expectations for continued headwinds on the top line. We continue to wait for the group catalysts to get a bit closer, including rising interest rates and an improved macro outlook."
Banks of Note: State Street (NYSE: STT), Northern Trust (Nasdaq: NTRS) and Bank of New York Mellon (NYSE: BK)
Analyst, Glenn Schorr, said, "Not a bad quarter considering the environment as TB earnings hung in there thanks to reasonably stable AUM/AUC, fees that actually rose and there was definitely more NIM/NII stability than feared. That said, we see revenue headwinds persisting (including some seasonal pressures in 3Q) and continue to feel the stocks will be range-bound in the interim. The seasonal uptick in sec lending was a tailwind to the top line this quarter (+37% q/q on average). Lower markets held AUC/AUM down (-1% and -2%), on a sequential basis, but related fees held up, increasing 3%, and 9%, respectively. Following the Fed’s recently released NPR, trust banks revised their estimated B3 T1C ratios this quarter, but with differing implications. The group is relatively inexpensive, and there is lots of capital, but ROEs remain low. We are maintaining our Neutral view on the sector given our expectations for continued headwinds on the top line. We continue to wait for the group catalysts to get a bit closer, including rising interest rates and an improved macro outlook."
Banks of Note: State Street (NYSE: STT), Northern Trust (Nasdaq: NTRS) and Bank of New York Mellon (NYSE: BK)
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