NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases this month’s edition of The Bank Treasury Newsletter Chart Deck, by Ethan Heisler, founder and editor-in-chief of The Bank Treasury Newsletter and Senior Director for KBRA.
This month’s edition of the chart deck continues the analysis in the June 2019 edition of Bank Talk: After-show, focusing on a potential causal relationship between a bank’s loans-to-deposits ratio (LDRs) and the book cost of its time deposits. In other words, banks with high LDRs pay more for deposits than banks with low LDRs, and that this effect is greater when they are in a state with a high proportion of banks operating with LDRs over 90%.
The chart deck includes a comparison of regional and community banks to the top 25 banks by LDR and how the gap between large and small banks by this measure has been widening since 2013. With regional and community banks averaging 89% and the top 25 banks averaging 70%, the difference between the two groups is the widest it has been in more than 30 years. The chart deck includes a screen for banks with LDRs over 90% and 95%, by U.S. state, and a scatter plot of LDRs and cost of time deposits for 5,250 banks as of Q1 2019.
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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.