Colombia Banking System Update 2014 - 3rd quarterFerhat Guven
The Colombian banking system continues to see strong credit growth and profitability. Loan growth has slowed to a healthier pace of around 13% while mortgage growth remains strong at 28%. Mortgage penetration is still low but rising, supported by low interest rates. Inflation has risen above the central bank's 3% target, leading to interest rate hikes to cool the economy, which will boost bank profits going forward. The banking system remains well capitalized to finance further growth.
Our October 2010 Newsletter is now available. The Newsletter Article, “Can The Fed Boost The Economy?” discusses the four things that Fed Chair Bernanke said that the Fed could do to boost the economy. The article explains how each of the 4 options he proposed would affect your company’s future. Our second article, “In Case You Didn’t Notice, The Recession Ended In June 2009?” addresses the real meaning of the recessionary slide ending before the stimulus had any impact and what it will take for the economy to have a strong recovery. Our final article, “Is The Real Employment Picture Still Deteriorating?” talks about the negative meaning of last Friday’s Labor Department unemployment report and its long term implications.
This document analyzes Wells Fargo & Company and recommends buying its stock. It summarizes that Wells Fargo had a 16% increase in net income in 2013 and is expected to continue growing. It also discusses positive economic factors like increasing GDP and consumer confidence that will benefit Wells Fargo's loan business. The analysis concludes that Wells Fargo is well positioned for future growth with a diversified business model and a strong performance in the most recent bank stress tests.
AXP Applied Equity Valuation new versionQiaochu Geng
This document provides a research report on American Express (AXP) stock from the Krause Fund. It recommends holding the stock based on an analysis of the economy, industry, and company. The economy is recovering and consumer confidence is rising, which will benefit credit card companies like AXP. AXP is the world's largest card issuer and continues expanding globally. The report provides forecasts for US GDP growth, unemployment, and consumer confidence to remain positive in the near future.
Pacific Asset Management is sub-advisor to the AdvisorShares Pacific Asset Enhanced Floating Rate ETF (FLRT)*
2014 has seen the consensus of higher Treasury yields and economic activity fail to materialize. Lower rates and risk premiums have led to strong returns year-to-date. In this commentary, Portfolio Managers David Weismiller, Michael Marzouk, and Bob Boyd discuss the current market environment, outlook, and portfolio positioning.
*Effective but not available for sale at this time. Go to www.advisorshares.com for more information.
This Credit Suisse Emerging Consumer Survey Databook provides granular detail of the market research that underpins the conclusions and themes highlighted in the Credit Suisse Emerging Consumer Survey 2012, a comprehensive and exclusive study of the consumption patterns and plans of individuals residing in eight key economies across the emerging world. Specifically, the markets we have incorporated in this survey are China, India, Brazil, Russia, Saudi Arabia, Egypt, Indonesia and Turkey. In total, these markets account for over 3.3 billion people.
- Download the 2012 Emerging Consumer Survey Databook (PDF): http://bit.ly/1durZ4B
- Order the print version of the databook: http://bit.ly/1mwfKre
- Visit the Credit Suisse Research Institute website: http://bit.ly/18Cxa0p
The RBI released data on credit deployment by Indian banks in April 2012. Key highlights include:
- Non-food credit growth was 16.5% YoY, declining from the previous month.
- Industrial loans grew faster than retail or agriculture loans. Mining, metals and cement saw strong growth.
- Infrastructure loan growth moderated further. Power and roads saw healthy growth while telecom declined.
- Personal and housing loan growth also moderated. Vehicle, education and credit card loans grew strongly.
- Services loan growth was driven by NBFCs and trade. Agricultural loan growth improved YoY.
Deloitte Report "Global Powers of Retail 2014"Oliver Grave
This document provides an overview and analysis of the global economic outlook and its implications for retailers. It discusses economic growth forecasts and challenges facing major economies like China, the United States, and Europe. For China, it notes a slowing economy and issues like debt from shadow banking that could impact sustained growth. The US is expected to see better growth in 2014 than 2013, assuming the Federal Reserve's tapering of monetary policy proceeds smoothly. Political uncertainties pose risks to predictions.
Colombia Banking System Update 2014 - 3rd quarterFerhat Guven
The Colombian banking system continues to see strong credit growth and profitability. Loan growth has slowed to a healthier pace of around 13% while mortgage growth remains strong at 28%. Mortgage penetration is still low but rising, supported by low interest rates. Inflation has risen above the central bank's 3% target, leading to interest rate hikes to cool the economy, which will boost bank profits going forward. The banking system remains well capitalized to finance further growth.
Our October 2010 Newsletter is now available. The Newsletter Article, “Can The Fed Boost The Economy?” discusses the four things that Fed Chair Bernanke said that the Fed could do to boost the economy. The article explains how each of the 4 options he proposed would affect your company’s future. Our second article, “In Case You Didn’t Notice, The Recession Ended In June 2009?” addresses the real meaning of the recessionary slide ending before the stimulus had any impact and what it will take for the economy to have a strong recovery. Our final article, “Is The Real Employment Picture Still Deteriorating?” talks about the negative meaning of last Friday’s Labor Department unemployment report and its long term implications.
This document analyzes Wells Fargo & Company and recommends buying its stock. It summarizes that Wells Fargo had a 16% increase in net income in 2013 and is expected to continue growing. It also discusses positive economic factors like increasing GDP and consumer confidence that will benefit Wells Fargo's loan business. The analysis concludes that Wells Fargo is well positioned for future growth with a diversified business model and a strong performance in the most recent bank stress tests.
AXP Applied Equity Valuation new versionQiaochu Geng
This document provides a research report on American Express (AXP) stock from the Krause Fund. It recommends holding the stock based on an analysis of the economy, industry, and company. The economy is recovering and consumer confidence is rising, which will benefit credit card companies like AXP. AXP is the world's largest card issuer and continues expanding globally. The report provides forecasts for US GDP growth, unemployment, and consumer confidence to remain positive in the near future.
Pacific Asset Management is sub-advisor to the AdvisorShares Pacific Asset Enhanced Floating Rate ETF (FLRT)*
2014 has seen the consensus of higher Treasury yields and economic activity fail to materialize. Lower rates and risk premiums have led to strong returns year-to-date. In this commentary, Portfolio Managers David Weismiller, Michael Marzouk, and Bob Boyd discuss the current market environment, outlook, and portfolio positioning.
*Effective but not available for sale at this time. Go to www.advisorshares.com for more information.
This Credit Suisse Emerging Consumer Survey Databook provides granular detail of the market research that underpins the conclusions and themes highlighted in the Credit Suisse Emerging Consumer Survey 2012, a comprehensive and exclusive study of the consumption patterns and plans of individuals residing in eight key economies across the emerging world. Specifically, the markets we have incorporated in this survey are China, India, Brazil, Russia, Saudi Arabia, Egypt, Indonesia and Turkey. In total, these markets account for over 3.3 billion people.
- Download the 2012 Emerging Consumer Survey Databook (PDF): http://bit.ly/1durZ4B
- Order the print version of the databook: http://bit.ly/1mwfKre
- Visit the Credit Suisse Research Institute website: http://bit.ly/18Cxa0p
The RBI released data on credit deployment by Indian banks in April 2012. Key highlights include:
- Non-food credit growth was 16.5% YoY, declining from the previous month.
- Industrial loans grew faster than retail or agriculture loans. Mining, metals and cement saw strong growth.
- Infrastructure loan growth moderated further. Power and roads saw healthy growth while telecom declined.
- Personal and housing loan growth also moderated. Vehicle, education and credit card loans grew strongly.
- Services loan growth was driven by NBFCs and trade. Agricultural loan growth improved YoY.
Deloitte Report "Global Powers of Retail 2014"Oliver Grave
This document provides an overview and analysis of the global economic outlook and its implications for retailers. It discusses economic growth forecasts and challenges facing major economies like China, the United States, and Europe. For China, it notes a slowing economy and issues like debt from shadow banking that could impact sustained growth. The US is expected to see better growth in 2014 than 2013, assuming the Federal Reserve's tapering of monetary policy proceeds smoothly. Political uncertainties pose risks to predictions.
Central banks continue to be positive on gold, with 21% of central banks intending to increase their gold reserves over the next 12 months according to a survey. Central banks are increasingly valuing gold's performance during crises as this now tops their rationale for holding gold. However, central banks have less conviction about the overall trend in central bank gold holdings increasing compared to last year. Nearly half of central banks plan to increase their allocation to sustainable bonds in the next 12 months.
This document summarizes research on millennial housing demand in the United States. It finds that millennial household formation and homeownership have been suppressed since the Great Recession due to high unemployment, stagnant incomes, high student debt loads, and barriers to mortgage credit. However, as millennials age and economic conditions continue improving, their housing demand is projected to increase and support growth in both the rental and homeownership markets. The large size of the millennial generation means unlocking their housing potential could have significant implications, including boosting demand for affordable rentals and expanding access to homeownership through low down payment loans and outreach to minority groups.
This report recommends selling shares of Glacier Bancorp (GBCI) as the stock appears overvalued. The report cites Glacier's missed analyst EPS estimates in recent quarters and reliance on acquisitions to drive growth as concerns. Projections estimate Glacier will grow at a slower pace of around 4.7% annually over the next five years due to regulatory constraints and a gradually rising interest rate environment. Based on a DCF model valuing Glacier at $22.61, the current stock price of $24.36 represents an overvaluation of approximately 6.5%, leading to a recommended target price of $23 and rating of "Sell".
2016/17 China Macroeconomic Outlook & Market OpportunitiesNan BAI,CFA
The document provides an analysis of China's macroeconomic environment and outlook for 2017. It finds that China's leverage levels are very high, especially in the corporate and local government sectors, though central government debt is relatively low. Deleveraging efforts are underway but progress has been slow. Financial reforms have continued to deepen markets but more efforts are still needed. Credit defaults have become more frequent in recent years but a systemic crisis is deemed unlikely. The report offers investment strategies for 2017, seeing opportunities in equities and fixed income given Renminbi inclusion in the SDR basket.
Industrial loans continue to be the key driver of overall loan growth in India, with industries such as mining, metals and infrastructure remaining major contributors. Agricultural loan growth improved marginally on a year-over-year basis but still lags overall growth. Retail loan growth moderated further due to slowing housing loans, though other segments like vehicle and education loans grew strongly. The services sector saw loan growth in line with overall levels, led by the strong performance of non-banking financial companies.
2015-PA-en-Lower down payment regulation to boost loan growth in exchange of ...Putri Amanda Mardiatiwi
The Indonesian government lowered down payment requirements for loans to boost economic growth amid unfavorable conditions. This is expected to increase loan and financing growth, especially in the consumer segment. However, it also raises credit risks as borrowers take on higher debt. Banks and finance companies will face challenges maintaining asset quality as non-performing loans may rise due to the economic slowdown and higher loan-to-value ratios from the new regulation. Ratings on consumer finance companies are expected to remain stable despite increased risks.
Discover Financial Services (DFS)_Research reportDavid Antoine
This document analyzes Discover Financial Services as an investment opportunity. Key drivers for DFS's revenues and earnings include economic growth, interest rates, its low net charge-off rate compared to peers, and growth in student loans. A relative valuation and discounted cash flow analysis find DFS is undervalued compared to its peers. While risks include declining credit card rates or rising unemployment, the analyst recommends buying DFS given opportunities to improve efficiency and margins, with the stock trading below its estimated value of $62 per share.
- Attributable profit for ABC Holdings increased 49% to BWP198 million compared to BWP133 million in the prior year, though earnings per share only increased 10% due to a rights issue and loan conversion.
- Most banking subsidiaries performed well except for BancABC Tanzania and Mozambique. Tanzania continued to struggle with impairments while one large impaired exposure impacted Mozambique.
- The Group's balance sheet grew 18% to BWP15.8 billion while loans increased 15% and deposits grew 14%. Net interest income increased 50% and non-interest income rose 25% though impairments were up 137%.
Us Banking Industry PowerPoint Presentation Slides SlideTeam
Presenting this set of slides with name - US Banking Industry Powerpoint Presentation Slides. This aptly crafted editable PPT deck contains fourty slides. Our topic specific US Banking Industry Powerpoint Presentation Slides presentation deck helps devise the topic with a clear approach. We offer a wide range of custom made slides with all sorts of relevant charts and graphs, overviews, topics subtopics templates, and analysis templates. Speculate, discuss, design or demonstrate all the underlying aspects with zero difficulty. This deck also consists creative and professional looking slides of all sorts to achieve the target of a presentation effectively. You can present it individually or as a team working in any company organization.
Underbanked and Unbanked Consumers in the U.S.: Successfully Targeting Consum...MarketResearch.com
This document provides an in-depth analysis of underbanked and unbanked consumers in the U.S. It finds that 26% of U.S. households are underbanked or unbanked, relying heavily on alternative financial services like check cashing, payday loans, and money orders. The economic downturn since 2007 increased financial insecurity and pushed more households to these alternative services. The report examines how banks and alternative financial service providers are targeting this growing demographic through expanded products, locations, and new technologies.
The Lead Left Quarterly Capital Market Report 4Q 2015The Lead Left
The document provides a quarterly review and outlook of the capital markets in Q4 2015 and Q1 2016. Key points covered include:
- High yield bond and leveraged loan issuance volumes declined in 2015 from the previous year due to market volatility and outflows from loan funds.
- Middle market sponsor leveraged loan volume was also down while private credit funds continued investing opportunistically.
- Institutional investors held more cash while banks reduced underwriting of highly leveraged transactions due to regulatory pressures.
The document evaluates GAVI's co-financing policy. It finds the policy has:
1) Raised country awareness and ownership of vaccine financing. Countries are on track to sustainable financing if they maintain GAVI prices and funding.
2) Implementation has increased country contributions but some defaults occur due to procedural or priority issues. Co-procurement incentivizes ownership but costs are not always clear.
3) Monitoring can be improved by strengthening skills and commitment. Success requires affordable vaccines, efficient procurement, and financial planning accounting for changing policies. Barriers include abrupt changes and lack of post-GAVI support.
Barómetro de Prácticas de Pago en la región de Asia Pacífico (Payment practic...Ignacio Jimenez
Las dudas sobre el desempeño económico de China persisten y ha provocado una nueva revisión a la baja de las previsiones de crecimiento del 6,9% de este año al 6,7% en 2016. En este entorno, el Barómetro de Prácticas de Pago en la región de Asia Pacífico distribuido por Crédito y Caución muestra un aumento en los niveles de morosidad en las operaciones B2B en China. Esta evolución puede generar un efecto de reacción en cadena en la liquidez empresarial en varios países y empeora las perspectivas de riesgo de crédito en la región.
The banking industry appears to be undergoing a renaissance driven by changing consumer behavior and technical innovation. Software is eating the industry. In retrospect, we can see how the first wave of innovation came in areas such as online account access and payments. Changing consumer behavior (such as the shift to mobile) and the use of big data has enabled increasingly complex transactions (such as lending and asset management) to move online. Consumers have largely stopped going to retail branches, and reserve the occasional branch visit for major one-off transactions.
Our first investment in the financial services industry came many years ago with an investment in LendingClub. We put both equity and debt into the company, making a sizable purchase of loans via the platform itself. We saw the company’s potential to bring marketplace dynamics and software disruption to the lending industry. The end goal for borrowers and investors on the platform was simple: lower cost loans for borrowers, increased yields for investors, and high levels of customer satisfaction. As a result, LendingClub has grown into a sizable public company. With experience on the platform and a realization of the potentially transformative nature of this model, we’ve gone on to invest in companies across the online lending space: Kabbage (www.kabbage.com), LendUp (www.lendup.com), and SoFi (www.sofi.com).
The renaissance in financial services has drawn in substantial amounts of venture capital. In the past year alone, the number of fintech deals has grown 16% and the capital funded is up 46%.
While many entrepreneurs develop expertise in the specific segment they intend to disrupt, we’ve noticed that startups usually don’t have the time or resources to look outside their niche and understand how they fit into the larger context of banking and lending markets. To help put the industry in perspective, we developed an overview of the banking industry in the US. What’s remarkable is not only the insights this gives into the financial lives of Americans (be it millenials or seniors), but also the perspective this gives us on the large banks we’ve all come to use. Indeed, consolidation over the last several decades has led the four major banks (JP Morgan, Bank of America, Citigroup, and Wells Fargo) to hold around half of the market’s depository assets.
Today we’re happy to provide the first version of this industry overview. We’ve chosen brevity over depth, so as to provide a snapshot of the overall banking landscape. We’ll continue to iterate on this overview and welcome questions and comments. In subsequent posts, we plan to provide deeper dives into sectors that are of interest to both ourselves and others. We look forward to contributing to what feels like yet another opportunity to be at the front door of history-making companies.
US markets have posted strong numbers last few quarters. however increased lending in the subprime segment, has increased exposure to delinquencies leading to potential mass defaults
This document summarizes a report on the sources and systemic remedies of recent turmoil in financial markets. It discusses how an unprecedented period of monetary expansion by the Federal Reserve from 2003-2005 led to easy credit and risky lending practices, fueling bubbles in housing and derivatives markets. When the subprime mortgage crisis emerged in 2007, it exposed severe liquidity and risk issues throughout the financial system. While the Fed has responded with interest rate cuts and liquidity injections, its departure from inflation targeting and signaling of more serious economic problems poses dangers. Overall reforms are needed in risk management at financial institutions and a return to disciplined monetary policy to restore stability.
The document provides an overview of recent US economic data and projections. It discusses improving indicators for GDP growth, unemployment claims, consumer spending and inflation expectations. Housing starts are gradually recovering but vehicle sales have far to go. The federal budget deficit was $1.3 trillion in 2010 and is projected to be $1.5 trillion in 2011, with the debt-to-GDP ratio expected to continue rising according to baseline forecasts.
Mercer Capital's BankWatch | October 2013 | Loan Growth Resumes, Remains SlowMercer Capital
Brought to you by the Financial Institutions Team of Mercer Capital, these monthly newsletters are focused on bank activity across the United States. Each edition of Bank Watch highlights various banking metrics, including public market indicators, M&A market indicators, and key indices of the top financial institutions, providing insight into financial institution valuation issues.
The document provides an overview of recent US economic data and projections, including:
1) Several key economic indicators are showing continued recovery, such as GDP growth, unemployment claims, and consumer spending. However, unemployment remains elevated.
2) Inflation expectations remain low according to market indicators and Fed forecasts. The federal budget deficit is projected to remain high over the next decade, increasing the national debt burden.
3) Overall the recovery is expected to continue gradually, but significant downside risks remain, such as a double-dip recession or failure to reduce long-term budget imbalances.
This document analyzes debt issues in Canada and around the world. It discusses different types of debt including corporate/business debt, household debt, and government debt. Global forecasts indicate that consumer spending, exports, and government spending drive economies. The document then examines levels of government debt, trends in rising corporate debt, and high and rising household debt in countries like Canada. It notes risks associated with high debt levels including potential increases in default rates if interest rates rise.
Paul Young, a CPA and expert in financial solutions, risk management, and public policy, presents on the looming global debt crisis. The presentation covers the different types of debt including government, corporate, and consumer debt. It is noted that government debt levels are over 92% of GDP for many countries and corporate debt among emerging markets has risen sharply. Both Canadian household debt levels and the number of Canadians struggling to pay bills are at concerning highs. The blog notes China may have $5 trillion in bad debt and the debt crisis will have major global impacts when interest rates rise.
Central banks continue to be positive on gold, with 21% of central banks intending to increase their gold reserves over the next 12 months according to a survey. Central banks are increasingly valuing gold's performance during crises as this now tops their rationale for holding gold. However, central banks have less conviction about the overall trend in central bank gold holdings increasing compared to last year. Nearly half of central banks plan to increase their allocation to sustainable bonds in the next 12 months.
This document summarizes research on millennial housing demand in the United States. It finds that millennial household formation and homeownership have been suppressed since the Great Recession due to high unemployment, stagnant incomes, high student debt loads, and barriers to mortgage credit. However, as millennials age and economic conditions continue improving, their housing demand is projected to increase and support growth in both the rental and homeownership markets. The large size of the millennial generation means unlocking their housing potential could have significant implications, including boosting demand for affordable rentals and expanding access to homeownership through low down payment loans and outreach to minority groups.
This report recommends selling shares of Glacier Bancorp (GBCI) as the stock appears overvalued. The report cites Glacier's missed analyst EPS estimates in recent quarters and reliance on acquisitions to drive growth as concerns. Projections estimate Glacier will grow at a slower pace of around 4.7% annually over the next five years due to regulatory constraints and a gradually rising interest rate environment. Based on a DCF model valuing Glacier at $22.61, the current stock price of $24.36 represents an overvaluation of approximately 6.5%, leading to a recommended target price of $23 and rating of "Sell".
2016/17 China Macroeconomic Outlook & Market OpportunitiesNan BAI,CFA
The document provides an analysis of China's macroeconomic environment and outlook for 2017. It finds that China's leverage levels are very high, especially in the corporate and local government sectors, though central government debt is relatively low. Deleveraging efforts are underway but progress has been slow. Financial reforms have continued to deepen markets but more efforts are still needed. Credit defaults have become more frequent in recent years but a systemic crisis is deemed unlikely. The report offers investment strategies for 2017, seeing opportunities in equities and fixed income given Renminbi inclusion in the SDR basket.
Industrial loans continue to be the key driver of overall loan growth in India, with industries such as mining, metals and infrastructure remaining major contributors. Agricultural loan growth improved marginally on a year-over-year basis but still lags overall growth. Retail loan growth moderated further due to slowing housing loans, though other segments like vehicle and education loans grew strongly. The services sector saw loan growth in line with overall levels, led by the strong performance of non-banking financial companies.
2015-PA-en-Lower down payment regulation to boost loan growth in exchange of ...Putri Amanda Mardiatiwi
The Indonesian government lowered down payment requirements for loans to boost economic growth amid unfavorable conditions. This is expected to increase loan and financing growth, especially in the consumer segment. However, it also raises credit risks as borrowers take on higher debt. Banks and finance companies will face challenges maintaining asset quality as non-performing loans may rise due to the economic slowdown and higher loan-to-value ratios from the new regulation. Ratings on consumer finance companies are expected to remain stable despite increased risks.
Discover Financial Services (DFS)_Research reportDavid Antoine
This document analyzes Discover Financial Services as an investment opportunity. Key drivers for DFS's revenues and earnings include economic growth, interest rates, its low net charge-off rate compared to peers, and growth in student loans. A relative valuation and discounted cash flow analysis find DFS is undervalued compared to its peers. While risks include declining credit card rates or rising unemployment, the analyst recommends buying DFS given opportunities to improve efficiency and margins, with the stock trading below its estimated value of $62 per share.
- Attributable profit for ABC Holdings increased 49% to BWP198 million compared to BWP133 million in the prior year, though earnings per share only increased 10% due to a rights issue and loan conversion.
- Most banking subsidiaries performed well except for BancABC Tanzania and Mozambique. Tanzania continued to struggle with impairments while one large impaired exposure impacted Mozambique.
- The Group's balance sheet grew 18% to BWP15.8 billion while loans increased 15% and deposits grew 14%. Net interest income increased 50% and non-interest income rose 25% though impairments were up 137%.
Us Banking Industry PowerPoint Presentation Slides SlideTeam
Presenting this set of slides with name - US Banking Industry Powerpoint Presentation Slides. This aptly crafted editable PPT deck contains fourty slides. Our topic specific US Banking Industry Powerpoint Presentation Slides presentation deck helps devise the topic with a clear approach. We offer a wide range of custom made slides with all sorts of relevant charts and graphs, overviews, topics subtopics templates, and analysis templates. Speculate, discuss, design or demonstrate all the underlying aspects with zero difficulty. This deck also consists creative and professional looking slides of all sorts to achieve the target of a presentation effectively. You can present it individually or as a team working in any company organization.
Underbanked and Unbanked Consumers in the U.S.: Successfully Targeting Consum...MarketResearch.com
This document provides an in-depth analysis of underbanked and unbanked consumers in the U.S. It finds that 26% of U.S. households are underbanked or unbanked, relying heavily on alternative financial services like check cashing, payday loans, and money orders. The economic downturn since 2007 increased financial insecurity and pushed more households to these alternative services. The report examines how banks and alternative financial service providers are targeting this growing demographic through expanded products, locations, and new technologies.
The Lead Left Quarterly Capital Market Report 4Q 2015The Lead Left
The document provides a quarterly review and outlook of the capital markets in Q4 2015 and Q1 2016. Key points covered include:
- High yield bond and leveraged loan issuance volumes declined in 2015 from the previous year due to market volatility and outflows from loan funds.
- Middle market sponsor leveraged loan volume was also down while private credit funds continued investing opportunistically.
- Institutional investors held more cash while banks reduced underwriting of highly leveraged transactions due to regulatory pressures.
The document evaluates GAVI's co-financing policy. It finds the policy has:
1) Raised country awareness and ownership of vaccine financing. Countries are on track to sustainable financing if they maintain GAVI prices and funding.
2) Implementation has increased country contributions but some defaults occur due to procedural or priority issues. Co-procurement incentivizes ownership but costs are not always clear.
3) Monitoring can be improved by strengthening skills and commitment. Success requires affordable vaccines, efficient procurement, and financial planning accounting for changing policies. Barriers include abrupt changes and lack of post-GAVI support.
Barómetro de Prácticas de Pago en la región de Asia Pacífico (Payment practic...Ignacio Jimenez
Las dudas sobre el desempeño económico de China persisten y ha provocado una nueva revisión a la baja de las previsiones de crecimiento del 6,9% de este año al 6,7% en 2016. En este entorno, el Barómetro de Prácticas de Pago en la región de Asia Pacífico distribuido por Crédito y Caución muestra un aumento en los niveles de morosidad en las operaciones B2B en China. Esta evolución puede generar un efecto de reacción en cadena en la liquidez empresarial en varios países y empeora las perspectivas de riesgo de crédito en la región.
The banking industry appears to be undergoing a renaissance driven by changing consumer behavior and technical innovation. Software is eating the industry. In retrospect, we can see how the first wave of innovation came in areas such as online account access and payments. Changing consumer behavior (such as the shift to mobile) and the use of big data has enabled increasingly complex transactions (such as lending and asset management) to move online. Consumers have largely stopped going to retail branches, and reserve the occasional branch visit for major one-off transactions.
Our first investment in the financial services industry came many years ago with an investment in LendingClub. We put both equity and debt into the company, making a sizable purchase of loans via the platform itself. We saw the company’s potential to bring marketplace dynamics and software disruption to the lending industry. The end goal for borrowers and investors on the platform was simple: lower cost loans for borrowers, increased yields for investors, and high levels of customer satisfaction. As a result, LendingClub has grown into a sizable public company. With experience on the platform and a realization of the potentially transformative nature of this model, we’ve gone on to invest in companies across the online lending space: Kabbage (www.kabbage.com), LendUp (www.lendup.com), and SoFi (www.sofi.com).
The renaissance in financial services has drawn in substantial amounts of venture capital. In the past year alone, the number of fintech deals has grown 16% and the capital funded is up 46%.
While many entrepreneurs develop expertise in the specific segment they intend to disrupt, we’ve noticed that startups usually don’t have the time or resources to look outside their niche and understand how they fit into the larger context of banking and lending markets. To help put the industry in perspective, we developed an overview of the banking industry in the US. What’s remarkable is not only the insights this gives into the financial lives of Americans (be it millenials or seniors), but also the perspective this gives us on the large banks we’ve all come to use. Indeed, consolidation over the last several decades has led the four major banks (JP Morgan, Bank of America, Citigroup, and Wells Fargo) to hold around half of the market’s depository assets.
Today we’re happy to provide the first version of this industry overview. We’ve chosen brevity over depth, so as to provide a snapshot of the overall banking landscape. We’ll continue to iterate on this overview and welcome questions and comments. In subsequent posts, we plan to provide deeper dives into sectors that are of interest to both ourselves and others. We look forward to contributing to what feels like yet another opportunity to be at the front door of history-making companies.
US markets have posted strong numbers last few quarters. however increased lending in the subprime segment, has increased exposure to delinquencies leading to potential mass defaults
This document summarizes a report on the sources and systemic remedies of recent turmoil in financial markets. It discusses how an unprecedented period of monetary expansion by the Federal Reserve from 2003-2005 led to easy credit and risky lending practices, fueling bubbles in housing and derivatives markets. When the subprime mortgage crisis emerged in 2007, it exposed severe liquidity and risk issues throughout the financial system. While the Fed has responded with interest rate cuts and liquidity injections, its departure from inflation targeting and signaling of more serious economic problems poses dangers. Overall reforms are needed in risk management at financial institutions and a return to disciplined monetary policy to restore stability.
The document provides an overview of recent US economic data and projections. It discusses improving indicators for GDP growth, unemployment claims, consumer spending and inflation expectations. Housing starts are gradually recovering but vehicle sales have far to go. The federal budget deficit was $1.3 trillion in 2010 and is projected to be $1.5 trillion in 2011, with the debt-to-GDP ratio expected to continue rising according to baseline forecasts.
Mercer Capital's BankWatch | October 2013 | Loan Growth Resumes, Remains SlowMercer Capital
Brought to you by the Financial Institutions Team of Mercer Capital, these monthly newsletters are focused on bank activity across the United States. Each edition of Bank Watch highlights various banking metrics, including public market indicators, M&A market indicators, and key indices of the top financial institutions, providing insight into financial institution valuation issues.
The document provides an overview of recent US economic data and projections, including:
1) Several key economic indicators are showing continued recovery, such as GDP growth, unemployment claims, and consumer spending. However, unemployment remains elevated.
2) Inflation expectations remain low according to market indicators and Fed forecasts. The federal budget deficit is projected to remain high over the next decade, increasing the national debt burden.
3) Overall the recovery is expected to continue gradually, but significant downside risks remain, such as a double-dip recession or failure to reduce long-term budget imbalances.
This document analyzes debt issues in Canada and around the world. It discusses different types of debt including corporate/business debt, household debt, and government debt. Global forecasts indicate that consumer spending, exports, and government spending drive economies. The document then examines levels of government debt, trends in rising corporate debt, and high and rising household debt in countries like Canada. It notes risks associated with high debt levels including potential increases in default rates if interest rates rise.
Paul Young, a CPA and expert in financial solutions, risk management, and public policy, presents on the looming global debt crisis. The presentation covers the different types of debt including government, corporate, and consumer debt. It is noted that government debt levels are over 92% of GDP for many countries and corporate debt among emerging markets has risen sharply. Both Canadian household debt levels and the number of Canadians struggling to pay bills are at concerning highs. The blog notes China may have $5 trillion in bad debt and the debt crisis will have major global impacts when interest rates rise.
2019 Election| Global Debt| Personal, Corporate and Government Debt| July 2019paul young cpa, cga
This presentation is one perspective on Debt. It is not the only view. People are more than welcome to visit other sites like BEA, Stats Canada, OECD, Banks, etc.
Government debt rating is important as the lower the rating the higher premium is for government bonds. Higher premium means higher interest rates.
The impact of bank specific variables on the non performing loans ratio in th...Alexander Decker
This document analyzes factors that influence non-performing loan (NPL) ratios in the Albanian banking system. It discusses how NPL ratios have grown substantially since the 2008 financial crisis. The study aims to understand how bank-specific variables like capital adequacy, loan levels, loan-to-asset ratios, net interest margins, and returns on equity can explain NPL ratio levels. Regression analysis of quarterly data from 2002-2012 for Albanian banks will test relationships between NPL ratios and these independent variables.
Paul Young, a CPA and expert in financial solutions, risk management, and public policy, presents on the looming global debt crisis. The presentation covers the different types of debt including corporate, household, and government debt. It is noted that government debt levels are over 92% of GDP in many countries. The forecasts indicate rising default rates for corporate debt and growing household debt levels in countries like Canada. The risks of a debt crisis are growing as cheap debt cannot last forever and interest rate hikes could lead to increased defaults and difficulty servicing debt.
The Pepperdine Private Capital Markets Project, available at http://bschool.pepperdine.edu/privatecapital, is the first comprehensive and simultaneous investigation of the major private capital market segments. The initial research survey examined the behavior of the private capital market participants, investment types, expected and historical rates of return, financial ratio thresholds, coupon rate distributions and other investment characteristics.
Credit Profile and Rating Migration of Banks in Latin AmericaPinakyPaliwal
This document summarizes credit profiles and credit rating migration of banks in Latin America. It discusses what constitutes a credit profile and how credit ratings can migrate over time. It then provides an overview of the banking sector and economy in Latin America. It notes that while Latin American banks faced challenges, the sector has become stable and enticing. The outlook sections discuss Moody's reports on outlooks in 2013 and 2014, noting expected deterioration in credit conditions but overall stability for bank ratings due to solid profitability and capitalization.
"Perspectives and opportunities in the Peruvian financial sector"EY Perú
Artículo publicado por Jorge Acosta, Socio Líder de Consultoría de EY Perú, en el "Global Banking & Financial Policy Review 2015/2016" del IFLR (International Financial Law Review)
Indian Banking entering the new era of Basil III and Financial InclusionAnmol Narang
The document discusses non-performing assets (NPAs) in the Indian banking sector and how upcoming Basel III regulations and financial inclusion efforts will impact the sector. It provides details on how NPAs are classified and calculated. Global NPA levels are compared, showing they are not solely correlated with GDP and are influenced more by economic conditions and policies. Factors influencing Indian NPAs are analyzed, such as GDP growth, exchange rate fluctuations, and stock market performance.
- The document discusses the state of the US and European non-performing loan markets based on a survey conducted by Ernst & Young.
- In the US, banks have improved earnings and loan quality in recent years but still face risks from high levels of non-current loans and maturing commercial real estate loans.
- Meanwhile, the European NPL market is emerging as banks look to reduce €1 trillion in NPLs on their balance sheets, attracting both domestic and international investors, particularly to loans in Germany, the UK, Ireland and Spain.
Cover Story A shaky vision for Financial Inclusion
Outlook US Dollar
Stats Share of Public sector in capital formation
Emerging Country Peru
In Focus USA is second to China in monetary stimulus
Brexit refers to the UK's decision to leave the European Union after a 2016 referendum. While this creates uncertainty for UK businesses and those tied to the UK, the actual effects on India will be seen over the long run. In the short term, sectors like IT, automobiles, and pharmaceuticals that rely on the UK market saw declines. However, Brexit may also create opportunities for India such as cheaper UK exports and travel, and strengthening economic ties between the two nations. Overall, the impact on India is expected to be mixed, with both challenges and benefits emerging over the long run depending on how trade relations are restructured.
In this issue of paradise 3.0 magazine.we the editorial team is proud to publish the articles to build
our next generation in a smarter way and empowering people with the touch of the button with the
power of technology.
The rapid ascent of peer to peer and online direct lending models: the impact...James by CrowdProcess
This document summarizes an article from The Capco Institute Journal of Financial Transformation titled "The Rapid Ascent of Peer-to-Peer and Online Direct Lending Models: The Impact on Banking". It discusses the growth of peer-to-peer and online direct lending as alternatives to traditional banking. Key points include:
- P2P lending platforms like Lending Club and Prosper have grown rapidly and now provide over $250 million in loans per month.
- Institutional investors are increasingly investing in the P2P lending asset class for higher yields.
- Online direct lending is a broader category than P2P lending and has significant potential to further develop the alternative lending industry.
- The growth of crowdf
This document summarizes a study on credit demand and credit rationing in the informal financial sector in Uganda. It finds that while Uganda has experienced strong economic growth and declining poverty rates since the 1990s, access to formal credit remains limited for most Ugandans. As a result, the poor primarily rely on the informal financial sector for loans. The study uses household survey data to analyze factors that influence credit demand and credit rationing. It finds that expected returns, loan terms, borrower characteristics like relationships with lenders, reputation, and wealth influence whether borrowers receive their full requested loan amounts or are partially or fully denied credit. Understanding these factors could help improve credit access for the poor.
A Project Report on LRES_Anurag Ghosh_16PGDMBFS08Anurag Ghosh
This document is a project report on the SARFAESI Act and NPA management submitted by Anurag Ghosh. It begins with an acknowledgement expressing gratitude to the project guide Prof. Deepak Tandon. The methodology section describes the use of primary and secondary data sources from organizations like RBI and banks to analyze NPA levels and cases related to the SARFAESI Act. The document contains an index and sections on the overview of SARFAESI Act and NPA management, global and Indian loan scenarios, data analysis of top banks' NPAs showing a correlation between loans and NPAs, details of the SARFAESI Act, cases studies, recommendations and a conclusion.
The document summarizes findings from a 2012 national financial capability study in the United States. Some key findings:
1) Americans' ability to make ends meet showed some improvement from 2009 to 2012, which may reflect modest economic growth during this period, with fewer reporting large unexpected drops in income or difficulty covering expenses.
2) While more Americans reported having rainy day funds in 2012 compared to 2009, the majority still lack emergency savings and do not adequately plan for predictable expenses like college or retirement.
3) Many Americans continue risky financial behaviors like carrying credit card balances and using expensive forms of borrowing. Nearly half feel they have too much debt.
4) Most Americans view themselves as financially knowledgeable but few can
CDFA Annual VC Report for 2014 20150821Pete Mathews
The document analyzes 2014 private activity bond and volume cap trends based on a survey of state allocating authorities. Key findings include:
- Total national volume cap increased to $92.1 billion, up from $87.3 billion in 2013.
- Total private activity bond issuance increased to $11.6 billion after declining for three years, reversing the shrinking bond market trend.
- Industrial development bond issuance decreased to $270 million after being below $300 million in 2012 but over $1 billion as recently as 2009.
Similar to Peru Banking Update 2014 3rd quarter (20)
Jamestown Latin America Trends + Views: Urbanization in Latin AmericaFerhat Guven
The document discusses urbanization trends in Latin America and their implications for the housing market. It notes that Latin America is the most urbanized developing region, with over 80% of the population living in cities. Rapid urbanization has been driven by economic opportunities and quality of life factors in cities. However, urbanization has also created challenges around infrastructure, housing shortages, and inequality. The real estate market has grown in response to demand from urban populations but still faces issues around affordability and supply.
Jamestown Latin America Trends + Views Urbanization Trends in Latin AmericaFerhat Guven
Our latest “Trends and Views” piece addresses the concept of urbanization in Latin America,
and its potential impact on the region’s real estate market.
Jamestown Latin America | Trends + Views | Infrastructure Challenges in Latin...Ferhat Guven
Latin American economies require substantial improvement to physical infrastructure to raise potential GDP growth.
As macroeconomic stability has been achieved in the largest economies, the public sector now aims to prioritize microeconomic issues.
The region’s major economies must address inadequacies in the years to come, focusing on the quality of roads, railroads, bridges, airports, and ports.
Governments have started to prioritize the urgency of closing the infrastructure gap, by allocating more public resources for infrastructure and pursuing public-private partnerships.
Recently, there have been important strides made, with private capital increasingly attracted to investment opportunities in infrastructure projects in the region.
Jamestown Latin America: Trends+Views: Brazil's Central Bank and the Issue ...Ferhat Guven
The document discusses Brazil's central bank and the issue of its independence. It notes that while interest rates in Brazil have fallen substantially over the past decade, the benchmark interest rate remains higher than peers due to doubts about the inflation-targeting regime given the central bank is not independent. The document examines arguments for and against central bank independence, noting that while independence may enhance credibility, the track record of inflation targeting is mixed for both independent and non-independent central banks in Latin America. It concludes that the impact of Brazil's lack of central bank independence on interest rates is complex with no clear answer.
Jamestown Latin America | Trends + Views | Currency AnalysisFerhat Guven
The document discusses currency risk for US dollar-based real estate investors in Latin America. It finds that:
1) Currencies in the region have depreciated significantly against the US dollar this year, improving purchasing power for US investors.
2) Currency risk is reduced as currencies like the Brazilian real that were previously overvalued have moved closer to fair value.
3) Holding real estate assets in a basket of Latin American countries provides diversification benefits, as the currencies do not move in perfect tandem and have correlations below 1.
Jamestown Trends + Views Peru - 20130722 Ferhat Guven
- Peru's economy has performed well over the last decade, but its political system remains dysfunctional, with individuals rather than institutions dominating politics.
- The possibility of First Lady Nadine Heredia running for president in 2016 is a major focus of media attention and controversy, with polls showing most Peruvians opposed to the idea.
- Support for President Humala has dropped partly due to perceptions that he aims to perpetuate power for himself and his wife, as well as recent economic slowing, adding to the political intrigue.
Jamestown Latin America | Trends+Views | Brazil: Aiming for a Return to Grow...Ferhat Guven
Economic conditions in Brazil are likely to
improve this year but structural bottlenecks will
take years to resolve themselves, a testament
to the massive necessity to improve logistics,
transportation and education – all necessary to
improve Brazil’s competitiveness
Jamestown Latin America | Trends + Views | Colombia | May 2013Ferhat Guven
Last week, in a visit to Bogotá, Colombia, we held a series of meetings with government officials, economists, consultants, fund managers and real estate specialists, as part of our on the ground research effort.
Jamestown Latin America Research: Over the last several years, economic growth in Peru has performed at China-type levels, and its expansion has been Latin America’s most impressive over the last decade.
Jamestown, an Atlanta-based real estate investment manager, is launching its first venture outside of the US with a new Latin America subsidiary. The subsidiary, called Jamestown Latin America, will be headed by former Paladin executives and be focused initially on Brazil and the Andean region of South America. Jamestown has seeded the new platform with $50 million and expects to raise up to $200 million initially and have $1 billion under management within a few years through joint ventures, co-investments, and an eventual commingled fund.
If you're Planning to Build a House in Haldwani, Understanding the House Construction Cost in Haldwani is crucial. It's important to grasp the direct and indirect cost factors entailed in the Construction process before Initiating any work. This Understanding is pivotal for Efficient Budget allocation, allowing you to plan your finances more Effectively. Construction expenses can vary Significantly, Influenced by Diverse Elements such as site Location, raw material prices, Labour charges, and various other variables. Here at Geomatrix, we pride Ourselves on offering competitive rates for house construction in Haldwani, ensuring affordability without Compromising on quality and providing the best options within your budget. For a precise evaluation of the cost involved in constructing your dream home, consult our team of architects and construction experts.
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BEST FARMLAND FOR SALE | FARM PLOTS NEAR BANGALORE | KANAKAPURA | CHICKKABALP...knox groups real estate
welcome to knox groups real estate company in Bangalore. best farm land for sale near Bangalore and madhugiri . Managed farmland near Kanakapura and Chickkabalapur get know more details about the projects .Knox groups is a leading real estate company dedicated to helping individuals and businesses navigate the dynamic real estate market. With our extensive knowledge, experience, and commitment to excellence, we deliver exceptional results for our clients. Discover the perfect foundation for your agricultural aspirations with KNOX Groups' prime farm lands. These aren't just plots; they're the fertile grounds where vibrant crops flourish, livestock thrives, and unique agricultural ventures come to life. At KNOX, we go beyond selling land we curate sustainable ecosystems, ensuring that your journey toward agricultural success is seamless and prosperous.
The KA Housing - Catalogue - Listing TurkeyListing Turkey
Welcome to KA Housing, a distinguished real estate development nestled in the heart of Eyüpsultan, one of Istanbul’s most promising districts.
Just 10 minutes from the bustling city center, Eyüpsultan offers a serene escape with the convenience of urban living. The direct metro line ensures seamless connectivity to all parts of Istanbul, making it an ideal location for residents who seek both tranquility and vibrancy.
KA Housing boasts unparalleled accessibility, with proximity to Istanbul Airport only 30 minutes away, facilitating easy international travel. Effortless city access is guaranteed by direct metro and transportation links to Istanbul’s cultural and commercial hubs. Quick access to key metro lines connects you to every corner of the city within minutes, making commuting and exploring the city hassle-free.
The development offers luxurious living spaces with a range of unit layouts from 1+1 to 4+1, designed with meticulous attention to detail. Each unit features balconies or terraces, providing stunning vistas of Istanbul and enhancing the living experience. High-quality materials and superior craftsmanship ensure durability and elegance, while sound-proof insulation and high ceilings (2.95 m) offer comfort and sophistication.
Residents of KA Housing enjoy exclusive on-site amenities, including a state-of-the-art gym, outdoor swimming pool, yoga area, and walking paths. Entertainment options abound with a private cinema, children’s playground, and a variety of dining options including a café and restaurant. Security and convenience are paramount with 24/7 security, a dedicated carpark garage, and an IP intercom system.
KA Housing represents a prime investment opportunity with limited availability in a high-demand area, ensuring enduring value and potential for lucrative returns. Homes in this development provide exceptional value without compromising on quality, offering affordable luxury for discerning buyers. The construction is of the highest quality, built to the latest seismic and disaster resistance standards, ensuring safety and resilience.
The community and surroundings of KA Housing are enriched by close proximity to prestigious universities such as Haliç University, Bilgi University, and Istanbul Ticaret University, making it an ideal location for students and academics. The development is adjacent to the Alibeyköy stream leading into the Halic waters, offering serene natural escapes amidst lush greenery. Residents can enjoy the cultural richness of the area, surrounded by historical and cultural landmarks that blend leisure, nature, and culture seamlessly.
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The SVN® organization shares a portion of their new weekly listings via their SVN Live® Weekly Property Broadcast. Visit https://svn.com/svn-live/ if you would like to attend our weekly call, which we open up to the brokerage community.
AVRUPA KONUTLARI ESENTEPE - ENGLISH - Listing TurkeyListing Turkey
Looking for a new home in Istanbul? Look no further than Avrupa Konutlari Esentepe! Our beautifully designed homes provide the perfect blend of luxury and comfort, making them the perfect choice for anyone looking for a high-quality home in the city.
With a wide range of apartment types available, from 1+1 to 4+1, we have something to suit every need and budget. Each apartment is designed with attention to detail and features spacious and bright living areas, making them the perfect place to relax and unwind after a long day.
One of the things that sets Avrupa Konutlari Esentepe apart from other developments is our focus on creating a community that is both comfortable and convenient. Our homes are surrounded by lush green spaces, perfect for enjoying a peaceful stroll or having a picnic with friends and family. Additionally, our complex includes a variety of social and recreational amenities, such as swimming pools, sports fields, and playgrounds, making it easy for residents to stay active and socialize with their neighbors.
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Sense Levent Kagithane Catalog - Listing TurkeyListing Turkey
Sense Levent offers a luxurious living experience in the heart of Istanbul’s vibrant Levent district.
This cutting-edge development seamlessly integrates modern design with natural elements, featuring live evergreen plants maintained by an advanced irrigation system, ensuring lush greenery year-round.
The building’s elegant ceramic balconies are both stylish and durable, enhancing the overall aesthetic and functionality. Residents can enjoy the 700m Sky Lounge, which provides breathtaking views of Istanbul and a perfect space to relax and unwind.
Sense Levent promotes a healthy and active lifestyle with a full gym, swimming pool, sauna, and steam room, all available in the building. The interiors are crafted with high-quality materials, ensuring a luxurious and inviting living space.
Designed with young professionals in mind, Sense Levent features 1+1 and 2+1 units with smart floor plans and balconies. The project promises high investment returns, with an expected annual return of 6.5-7%, significantly above Istanbul’s average ROI.
Located in the rapidly growing and highly desirable Levent area, the development benefits from ongoing urban regeneration projects. Its prime location offers proximity to shopping malls, municipal buildings, universities, and public transportation, adding immense value to your investment.
Early investors can take advantage of discounted units during the construction phase, with an expected capital appreciation of +45% USD upon completion. Property Turkey provides comprehensive rental management services, ensuring a seamless and profitable investment experience.
Additionally, robust legal support and significant tax advantages are available through Property Turkey’s licensed Real Estate Investment Fund. Levent is a dynamic urban hub, ideal for young professionals with its numerous corporate headquarters and shopping malls.
Sense Levent is more than just a residence; it’s a place where dreams and opportunities come to life. Contact us today to secure your place in this exclusive development and experience the best of Istanbul living. Sense Levent: Sense the Opportunity. Live the Dream.
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Discover Yeni Eyup Evleri 2, nestled among the rising values of Eyupsultan, offering the epitome of modern living in Istanbul.
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Recent Trends Fueling The Surge in Farmhouse Demand in IndiaFarmland Bazaar
Embarking on the journey to acquire a farmhouse for sale is just the beginning; the real investment lies in crafting an environment that contributes to our mental and physical well-being while satisfying the soul. At Farmlandbazaar.com, India’s leading online marketplace dedicated to farm land, farmhouses, and agricultural lands, we understand the importance of transforming a humble farmland into a warm and inviting sanctuary. Let's explore the fundamental aspects that can elevate your farmhouse into a tranquil haven.
At Geomatrix, we Pride Ourselves on our Commitment to Superior Craftsmanship and client satisfaction. Our team Consists of Highly Qualified specialists including Architects, Engineers, project Managers, and skilled labourers who work seamlessly together to achieve ourclients' Objectives. Geomatrix is recognized as the Best Construction Company in Haldwani, Dedicated to bringing visions to life with unparalleled Expertise and Professionalism.
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1. Overview Earlier this year we published a series of notes that described the banking systems in Jamestown Latin America’s target markets. On a quarterly basis, we will provide updates on the financial performance and growth indicators of the various countries’ banking systems, while also highlighting any relevant news that could impact the local mortgage markets.
Peru Banking System Update: 2014 – 3rd Quarter
Executive Summary
•
Peruvian banks’ valuations compare favorably to US banks
•
Banking penetration in Peru is still very low when compared to other emerging market countries
•
US dollar deposits are outpacing soles deposits, with the number of depositors doubling since 2007
•
Credit growth is now primarily in local currency
•
Credit quality in Peru remains solid as the non-performing loan ratio for the system remains low
•
The outstanding mortgage to GDP ratio is just 5%, or about one-fourth the level in Chile, and well short of Brazil’s 9% ratio
2. TRENDS + VIEWS SEPTEMBER 2014 PAGE 2
Based on a number of major metrics, the Peruvian banking system performs well when compared to the United States’ major banks. Major Peruvian banks’ price-to-book ratios greatly exceed those of large US banks. The two major publicly traded Peruvian banks, Credicorp (the holding company for Banco de Credito) and Intercorp (the holding company for Interbank), have price to book ratios of 2.7x, according to Citigroup’s Latin American financial institutions research group. Meanwhile, the price to book ratio for the major U.S. banks is 1.1x (as of end-June 2014), versus a 20-year average for the same universe of U.S. banks of 1.7x.1 Large U.S. regional banks have an average price to book ratio of 1.4x, according to Deutsche Bank. Price to Book Ratios – Peruvian Banks v Major Global Banks The higher price to book ratios at the Peruvian banks is a reflection of the market’s optimism over their future growth prospects, and higher profitability ratios.
Peru Banking System Update: 2014 – 3rd Quarter
0
0.5
1
1.5
2
2.5
3
Credicorp (Peru)
Intercorp (Peru)
Wells Fargo
UBS
Bank of New York
Goldman Sachs
JP Morgan
HSBC
Morgan Stanley
Credit Suisse
BNP Paribas
Citicorp
Bank of America
Mitsubishi UFJ
Credit Agricole
Barclays
Deutsche Bank
Peruvian banks are more profitable than their US counterparts. In terms of profitability indicators, Peru’s publicly traded banks have an average ROE of 20%, while Deutsche Bank estimates that Credicorp has a sustainable ROE of 19%. In comparison, the most recent return on equity on all U.S. FDIC-insured banks is 8.8%, with the median ROE since 1975 at 11.9%. The universe of major U.S banks has a ROE of 9%. Return on Equity – Peruvian Banks v Major Global Banks Return on assets for the U.S banks averages 1.0%, well short of Credicorp’s 1.9%, while Intercorp’s exceeds 2%. Return on Assets – Peruvian Banks v Major Global Banks
-10%
-5%
0%
5%
10%
15%
20%
25%
Intercorp (Peru)
Credicorp (Peru)
Wells Fargo
Goldman Sachs
HSBC
Bank of New York
JP Morgan
Mitsubishi UFJ
UBS
Morgan Stanley
Credit Agricole
Citicorp
Bank of America
Barclays
Credit Suisse
Deutsche Bank
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
Intercorp (Peru)
Credicorp (Peru)
Wells Fargo
Goldman Sachs
Bank of New York
JP Morgan
HSBC
Morgan Stanley
Citicorp
Mitsubishi UFJ
Bank of America
UBS
Credit Agricole
Barclays
Credit Suisse
Deutsche Bank
1. Includes Bank of America, Morgan Stanley, Goldman Sachs, Citigroup, and JPMorgan according to Deutsche Bank’s financial institutions research group
BNP Paribas
BNP Paribas
3. TRENDS + VIEWS SEPTEMBER 2014 PAGE 3
Peru Banking System Update: 2014 – 3rd Quarter
Net interest margin at Credicorp is 4.9%, and at Intercorp an eye-popping 7.0%. Meanwhile U.S. banks average 3.2% for the large banks. Notably, margins on consumer loans in Peru remain very high. The average rate on these credits, according to official statistics, stands out at a rate of 43%. 2014 Growth: In Peru loan growth is forecast to reach 15%, with deposit growth slated to increase by 15% this year. Meanwhile loan growth for the U.S. universe of banks is just 3%, according to the most recent data, and forecasted to reach 4% for the year, while deposit growth is 7%. Capitalization: Tier 1 ratios at the Peruvian banks average 10%, which is comparable to 10% for the US banks. The last reported BIS ratio, an indicator of solvency which reflects the ratio of risk-bearing capital to risk-weighted assets, is a healthy 15% on average for the publicly traded Peruvian banks. Provisions: To manage future delinquencies, Peru’s coverage ratio of 165%, which reflects provisions over non- performing loans (NPLs), is down from 183% a year ago. U.S. banks display an average coverage ratio of 192%, above what is observed in the Peruvian system. NPL ratios for the entire Peru banking system average 2.8% according to Superintendencia de Banca, Seguros (SBS), the Peruvian banking regulator. This compares to 3.4% for the major banks in the United States, 2.0% for the large regional banks and 1.2% for the smaller regional banks.2 As of the last quarterly reporting cycle, Credicorp and Intercorp have NPL ratios of 3.3% and 2.5%, respectively.3 Low banking penetration The level of banking penetration in Peru is still very low when compared to other emerging market countries, whether looking at credit penetration, number of depositors, or other indicators.
Key Indicators – Peruvian Banks v Major US Banks
Peruvian Banks
US Banks4
Forecasted Loan Growth
15%
4%
Forecasted Deposit Growth
15%
7%
Tier 1 Ratios
10%
10%
Coverage Ratio
165%
192%
NPL Ratios
2.8%
3.4%
For example, cumulative deposits in the system total just over 218 billion soles as of June (up 12.5% year over year), or just over one-third of GDP. Total loans of 212 billion soles also comprise around one-third of GDP, on par with Mexico. By comparison, in Chile loans to GDP are approximately 75% and in China are well over 125%. Rapid credit growth now mainly in local currency Typically credit growth in Peru trends at three times real GDP growth, which was 5% in 2013. Based on data through June, credit growth was running at 16% year over year, with credit in local currency expanding at 23%, compared to 6% in US dollars. While loan growth was decelerating toward the end of 2013 and early 2014, due to a slowdown in economic activity and some greater risk aversion on the part of the Peruvian banks, credit expansion has been increasing thanks to measures adopted by the central bank. The monetary authority has reduced reserve requirements on soles on several occasions, which serves to stimulate credit in the economy.
2. Deutsche Bank US Coverage Universe 3. Ibid. 4. Ibid.
4. TRENDS + VIEWS SEPTEMBER 2014 PAGE 4
Peru Banking System Update: 2014 – 3rd Quarter
Year-on-year credit expansion in Peru (June 2014) Credicorp, Peru’s largest bank, reported loan growth of 2.4% in 2Q versus 1Q, but is guiding investors to expect a pickup in the months ahead, as economic activity bounces back in the latter part of 2014 with additional momentum expected for 2015-16 (economists look for 5.5%-6% GDP growth in 2015- 16.). Credicorp projects 14%-15% loan growth this year, both for itself and the banking system as a whole. In particular, corporates, which account for 20% of the system’s total loans, have been expanding their demand for credit. Overall loan growth reached 29% from this segment in June, with a 42% expansion in local currency. Demand for corporates should remain robust, due to some major infrastructure projects and concessions in the pipeline which will initiate construction in the months ahead. Small and micro enterprises have been less active clients, with loans mainly flat, a reflection of less dynamic conditions for these segments. Meanwhile consumer lending has been expanding at 12% year over year, led by auto loans which are growing at over 40%. There has been some deterioration in credit quality at the consumer level of late. US dollar deposits outpacing soles deposits While total deposits are increasing at 12% year over year, US dollar deposits are growing at 26%, a faster rate than that observed in soles, which rose 4% according to the most recent data. Depositors are shifting some of their assets into dollars, as a means of protecting against further depreciation of the sol,
Overall credit
16%
Credit growth (PEN)
23%
Credit growth (USD)
6%
Corporate Credit
29%
Consumer Loans
12%
Auto Loans
40%
which hit a 52-week low against the dollar, at 2.8375, on August 26th, representing a depreciation of 1.4% year to date. Since January 2013, the sol lost 11% of its value versus the dollar. However, with the highest ratio of central bank reserves to GDP in the region, the central bank has ample firepower to counteract any potential volatility in the sol. Some weakness in credit quality The non-performing loan (NPL) ratio for Peru rose to 2.84% in June 2014 versus 2.52% in June 2013. Loan delinquencies for small enterprises increased from 7.16% to 8.71%. However, this segment remains very profitable since average rates in soles to small businesses average 21%, according to SBS. In its quarterly earnings conference call, held in August, management of Credicorp stated that there has been an increased incidence of NPLs (50 basis points quarter over quarter) for small and medium-sized enterprises in its loan portfolio. Meanwhile NPLs at large corporates rose from 0.01% to 0.11%. The NPL ratio on mortgages is very low, at 1.25%. However this figure has risen from 0.92% a year ago. Banks have an important cushion as loan spreads on mortgages remain high in Peru. As competition increases in this segment, we would expect mortgage rates to fall. According to the most recent data provided by SBS, average mortgage rates are 7.64% in US dollars and 9.25% in soles, compared to the central bank’s policy rate of 3.75%. Overall, credit quality in Peru remains solid as the non- performing loan ratio for the system remains low, when compared to other emerging market countries. Soles-denominated mortgages on the rise Mortgages in Peru can be issued in soles or in US dollars, but there has been a trend toward greater issuance of mortgages in soles over the last 1-2 years. Of the total stock of mortgages, 35% (as of June) is now denominated in dollars versus 43% a year ago, and 65% as recently in 2010.
5. TRENDS + VIEWS SEPTEMBER 2014 PAGE 5
Peru Banking System Update: 2014 – 3rd Quarter
In general, sol-denominated mortgages dominate the middle market, while the higher tier buyers tend to seek dollar- denominated mortgages. The depreciation of the sol in 2013-14 has been a factor accounting for the shift in demand toward mortgages denominated in local currency, a healthy development. The June figures showed mortgage growth of 32% year over year in local currency, versus an 8% contraction in dollars. The decision of the central bank to release liquidity in soles by lowering reserve ratios, as it has done repeatedly in recent months, has also contributed to the divergence in demand for mortgages by currency. This move toward “de-dollarization” removes potential currency mismatches from the banks’ balance sheets. Number of depositors has nearly doubled since 2007 Banks in Peru are conservatively run. One indicator supporting this, as mentioned above, is that provisions (for losses) are 1.7x the level of non-performing loans, and were 2.0x as of January 2013. For mortgages, provisions are 2.1x the level of delinquent mortgages. Despite the conservative stance, growth in banking penetration is impressive: the number of depositors has increased from 6.5 million in 2007 to nearly 12 million currently. Banks are gradually expanding into regions of the country that thus far have seen an absence of financial intermediation. USD PEN system remains vulnerable The dual currency financial system remains a vulnerability, and is a legacy of the hyperinflation days of the 1980s and early 1990s. US dollars and soles are generally interchangeable on the streets of any major Peruvian city, and Peru remains one of the few countries in the region where deposits and loans are quoted in both currencies. Fortunately, there has been a steady trend of de-dollarization of credit as the country’s macro environment has solidified over the years. Loans denominated in dollars represent 39% of outstanding loans, down from 43% a year ago. Meanwhile, 41% of deposits are denominated in dollars, up from 36% a year ago, as a multi- year appreciation trend in the sol concluded, and citizens looked to protect themselves against additional currency weakness.
Underdeveloped mortgage market The outstanding mortgage to GDP ratio is just 5%, or about one-fourth the level in Chile, and well short of Brazil’s 9% ratio. Mortgages represent just 17% of total credit in the financial system. Only 216,000 mortgages exist in Peru, a small amount for a country with a population of 30 million but this figure is up 10% from a year ago. Mortgages issued via the subsidized Mi Vivienda program for lower income individuals have lost some momentum year to date. Through May, the number of Mi Vivienda loans fell 15% year over year. Analysts believe this is a function of slower economic growth, a more conservative stance on the part of banks toward extending mortgages to lower income individuals, and bottlenecks pertaining to processes to secure a Mi Vivienda loan. Takeaways The banking system of Peru remains healthy and well capitalized, and demand for mortgages continues to be robust. Banks are prioritizing the issuance of mortgages as a means of leveraging the ability to issue other consumer credits. Indeed, the consumer sector is especially profitable: the average rate on consumer loans in soles is 44% and 28% in US dollars. The central bank has been especially supportive of the banking sector, based on cuts in reserve requirements in soles and reductions of the policy rate, now at 3.75%, from 4.25% in October 2013.