US banks' loan growth; record share buybacks; utility M&A outlook
Today is Tuesday, December 7, 2021, and here’s your weekly selection of essential intelligence on financial markets and the global economy from S&P Global Market Intelligence. Subscribe to be notified of each new Insight Weekly.
In this edition, we take a close look at the U.S. banking industry’s third-quarter loan growth, which came to a year-over-year rate of 3.1%, excluding loans under the Paycheck Protection Program. Credit card loans rose 1.2% from a year ago, following five consecutive quarters of declines as consumer spending continued to accelerate. Construction loans climbed 4.1%, with loans for residential and nonresidential properties logging increases, while loan delinquencies continued to shrink. Auto loans grew robustly at 8.4%, as lenders resorted to competitive product offerings amid high demand and prices.
Share buybacks by S&P 500 companies totaled $232 billion in the third quarter of 2021, beating the quarterly record of $222.98 billion in the fourth quarter of 2018, according to data from S&P Dow Jones Indices. Share buybacks are on track for a new annual record this year as companies spend cash stockpiled during the early part of the pandemic.
North American electric utilities could flood the M&A market with contracted renewables portfolios in 2022 as those assets fetch attractive prices and the trend toward pure-play, investor-owned and regulated rate bases persists. While there may be some corporate-level and whole-subsidiary transactions, minority stake transactions and contracted renewable power asset recycling will likely dominate deal-making in 2022, analysts said.
US Banks' Loan Growth in Focus
Loan growth lags QOQ at largest US banks in Q3
Loans excluding the Paycheck Protection Program at the 15 largest U.S. banks grew by 1.7% quarter over quarter, compared to 2.0% growth for the wider industry.
—???Read the full article from S&P Global Market Intelligence
Banks see credit card loans rise YOY in Q3 as spending further accelerates
Credit card loans rose 1.2% year over year during the third quarter, compared to a 2.0% drop in the previous quarter, according to data from S&P Global Market Intelligence.
—???Read the full article from S&P Global Market Intelligence
Banks' exposure to construction loans kept climbing in Q3
Banks continued to increase their real estate construction lending portfolios, both nominally and relative to their balance sheets.
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'Planets aligned' for auto sector as banks record robust loan growth in Q3
Banks' total auto loans rose to $530.20 billion in the third quarter, up from $518.11 billion in the second quarter and $489.16 billion in the year-ago period.
—???Read the full article from S&P Global Market Intelligence
Deep Dives
In-depth features looking at the impact of major news developments in key industries.
Credit and Markets
US share buybacks on track for record year after rebound
Record levels of bond issuance and a sharp economic recovery have left companies flush with cash, encouraging corporate board rooms to return capital to shareholders.
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Fed risks liquidity crisis as it manages withdrawal from Treasury market
The size and structure of the Treasury market means it is likely the Federal Reserve will have to step in to provide liquidity in times of market stress.
—???Read the full article from S&P Global Market Intelligence
Financials
Top 50 US banks in Q3'21
Forty-one of the 50 largest U.S. banks and thrifts reported an increase in assets during the third quarter.
—???Read the full article from S&P Global Market Intelligence
US regulators worried about stablecoin risk weigh broader bank participation
A recent speech by a Federal Reserve official and the President's Working Group's stablecoin report suggested that banks can take on a larger role in the evolution toward a future monetary system through the use of stablecoins.
—???Read the full article from S&P Global Market Intelligence
European banks' Q3 profits rebound as provisions decline
The biggest banks in Europe booked significantly lower loan loss provisions in the third quarter, largely due to reduced downside risks as economies rebound from a coronavirus-prompted downturn, S&P Global Market Intelligence data shows.
—???Read the full article from S&P Global Market Intelligence
Better asset quality, economic rebound brighten Indian banks' earnings outlook
India's largest banks are well-positioned to see improved earnings for the rest of the fiscal year that ends in March 2022 as bad loans decline and the country's economic recovery picks up pace.
—???Read the full article from S&P Global Market Intelligence
Insurance
Berkshire leads the way as US P&C insurers grow share buybacks in Q3
Warren Buffett's Berkshire Hathaway accounted for the lion's share of buybacks at $7.63 billion, up 28% from the second quarter but down 15% from a year ago.
—???Read the full article from S&P Global Market Intelligence
Fintech
Chile's fintech bill raises expectations for growth in the sector
The proposed bill sets the stage for regulation of cryptocurrency providers, peer-to-peer lending, digital banks and online investment brokers, among other subsectors in the fintech industry.
—???Read the full article from S&P Global Market Intelligence
领英推荐
Lending fintechs in Argentina target low-income adults
During the pandemic, fintechs expanded to the interior of Argentina to deliver loan products. Online lenders in Argentina serve the underbanked, a high-risk segment overlooked by traditional banks that can provide opportunities for strong gains.
—???Read the full article from S&P Global Market Intelligence
Energy and Utilities
2022 utility M&A to focus on renewable asset recycling, minority stake sales
Industry analysts expect North American electric utilities to shed contracted renewables portfolios as momentum for shrinking unregulated businesses continues.
—???Read the full article from S&P Global Market Intelligence
Gas generators make their move as Texas redesigns power market
Plant developers are lobbying Texas regulators to create market products that would incentivize new gas-fired generation. One company, WattBridge, is leading the charge.
—???Read the full article from S&P Global Market Intelligence
US utilities ramp up spending plans, brace for winter and legislation
Management teams kept their eyes on rising gas prices, supply chain constraints and the passage and impact of federal energy policy during third-quarter earnings calls and the 2021 Edison Electric Institute Financial Conference.
—???Read the full article from S&P Global Market Intelligence
Metals and Mining
US coal employment holds steady as producers face tight labor market
The number of workers employed at U.S. coal mines was steady during the third quarter, barely budging as producers struggled to keep up with a rebound in coal demand tied to surging natural gas prices.
—???Read the full article from S&P Global Market Intelligence
Technology, Media and Telecommunications
Twitter CEO change 'pivotal' as new chief confronts stalling user growth
After Twitter CEO Jack Dorsey confirmed his resignation, investor groups and analysts said the leadership change is a net positive for the microblogging platform as it seeks to expand its user base and product offerings.
—???Read the full article from S&P Global Market Intelligence
The Week in M&A
Private equity investment in European financial services poised to dip in 2021
Private equity firms keen on UK midtier banks, but deals prove elusive
Chinese steel deal tops metals, mining M&A for week ended Nov. 26
The Big Picture
Trending
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Written and compiled by Louis Bacani