NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases this month’s edition of Bank Talk: The After-Show, by Ethan Heisler, founder and editor-in-chief of The Bank Treasury Newsletter and Senior Director for KBRA.
In the latest edition, Bankers Count Their Dollars and Cents, Ethan and Van discuss some of the potential pressures on bank profits, from slower growth in net interest income to higher expenses tied to technology and the digital transformation underway in the banking industry.
Ethan argues that banks need to become more like technology companies. He illustrates how traditional brick-and-mortar banks have twice as much of their operating budgets directed toward back-office functions instead of front office versus the leading online banks. Further, he argues that the simple economics of competition will drive the industry down to a much lower efficiency ratio than it has today. Ethan and Van then compare the efficiency ratios of banks versus the leading technology companies in the U.S.
Finally, Ethan and Van look at the positive trend in the ratio of interest expense to interest income, which Ethan argues implies heavier downward pressure on net interest income with the Fed on hold than maybe expected by bondholders.
Related Publications: (available at www.kbra.com)
-- The Bank Treasury Newsletter – March 2019
-- The Bank Treasury Newsletter Chart Deck– March 2019
CONNECT WITH KBRA
Twitter
LinkedIn
Download
the iOS App
YouTube
About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
