To screen ETFs by asset class, performance, yield and more, check out the
View as an RSS Feed
With banks set to report Q3 earnings, regulators will have an eye on how much of a boost profits get
by slashing reserves
for bad loans. Perfectly legal, the action nevertheless gives an unsustainable boost to profit - it's accounted for 23% of the bottom line for TBTFs over the last year - making banks look healthier just at the time they've thinned cushions against the next downturn.
View news story
Reserves are established to protect companies, shareholders, against future risk and is accounted for as a liability, thus reducing profits when established. When reserves are released, the liability is reduces and the funds flow to the bottom line. This is a common accounting practice used by all companies. Reserves go up and down with perceived future risk/liabilities. No big deal.
Oct 11, 2012. 03:41 PM
Link to Comment
Xignite quote data
© 2015 Seeking Alpha