- KeyCorp (KEY) and Fifth Third Bancorp (FITB) are among the regional lenders stepping up their commodities business as the big Wall Street banks pull back. "[Regional lenders] are definitely beginning to fill the void left by some of the big guys," says Bonanza Creek Energy CFO Bill Cassidy.
- Others stepping in include Australian bank Macquarie (MQBKY), Cargill, and BP. Last year, the top ten regional banks held an average of $23B in commodity derivatives on their books, up nearly 50% from 2009. Still, the amount is just a speck compared to the $3.9T on the books of the top 6 Wall Street banks.
- Even this modest amount is meaningful though, says Guggenheim's Marty Mosby, as it allows the regionals to "pop out and create some incremental revenue growth."
- ETFs: KRE, KBE, IAT, RKH, QABA, KRU, KBWR, KRS