Seeking Alpha

CCAR to be tougher in 2014, but banks in better shape too

  • American Express (AXP +0.4%), Discover (DFS +0.3%), U.S. Bancorp (USB +0.2%), and Wells Fargo (WFC -0.1%) are best positioned to be allowed large capital returns (about 70%) after the Fed's early 2014 stress tests, says Credit Suisse's Moshe Orenbuch, while Ciitgroup (C +0.2%) and PNC Financial (PNC +0.9%) are likely to show the biggest improvement from last year.
  • Overall, his team expects large cap bank capital returns to be 65% next year vs. about 48% in 2013. The median dividend payout ratio is expected at 22%, level with this year.
  • Orenbuch notes the CCAR will be tougher this time around - notably by assuming a global, not just domestic meltdown, and assuming a significant reversal in the property market - with commercial real estate exposure particularly harshly judged.
  • Balanced against that and likely winning, however, are far stronger capital positions of the banks, says Orenbuch.
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Comments (1)
  • june1234
    , contributor
    Comments (2655) | Send Message
     
    I can tell by the financials noticeable lagging the last 2 yrs .Think they know something?
    28 Nov 2013, 04:36 AM Reply Like
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