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The following article was published in our article directory on December 14, 2010.
Learn more about SpinDistribute Article Distribution System.
Article Category: Business Management
Author Name: xia zihui
After the "Great Depression" the most serious financial crisis since two years later, Wall Street began to recover. Major financial institutions has gradually divest non-performing assets to achieve steady revenue growth, while positive "ransom" to free from government control.
Right now, outside of Wall Street's confidence is improving, the United States six lines of credit default swaps (CDS) levels in the near future uncharacteristically dropped below the level of the industry in Europe, to the history of the U.S. banking industry the most secure level of debt.
With the industry recovery on track, the major institutions on Wall Street began looking for new business growth. Recovery in the developed economies face many situations of uncertainty, Wall Street, Asian-African expansion of emerging economies to become the new target.
The darkest moment of farewell
Since mid-2009, Wall Street head shrouded in cloud gradually dissipated. Especially this year, the U.S. banking industry to gradually reduce the amount of bad loans, the overall profit to achieve steady growth. Federal Deposit Insurance Corporation (FDIC) The latest data show that benefit from strong growth in revenue and reduced loan loss provisions, in the third quarter to be secured by the FDIC's 7760 U.S. commercial banks and savings institutions 14.5 billion profit a year earlier increase of 20 billion U.S. dollars. As of the end of the third quarter, not the proportion of bank earnings fell in June 2008 the lowest level since.
FDIC data, said third-quarter loan loss provisions, the banking sector fell 34.9 billion U.S. dollars, equivalent to only 45% of last year, the highest since the fourth quarter of 2007, the lowest level; year industry-wide interest income increased by 81 billion U.S. dollars, an increase of 8.1%; banking portfolio income of 32 billion U.S. dollars, a year earlier loss of 4.1 billion.
Based on this report, FDIC Chairman Bell said the prospects for the U.S. banking industry "cautiously optimistic." She believes that the U.S. banking industry is cleaning up the balance sheet, and in accordance with changes in financial markets and the economy to adjust to the housing market out of bad loans accumulated during the bubble.
Shi generous assistance during the crisis on Wall Street the U.S. government seems to have aimed at this "revival" trend began to accelerate out of large financial institutions, holding, recovery of taxpayers "investment." Earlier this month, the U.S. Treasury 105 billion dollars in the sale price of the remaining shares held by Citigroup, and there are plans in the first half of next year through the sale of American International Group (AIG) shares of recycling 15 billion U.S. dollars capital. Statistics show that Citigroup shares during the year rose to 40%, AIG shares rose as much as 64%.
Not only allows the government to withdraw shares from financial institutions to pay huge dividends at the same time weaken the "state" background also allowed to expand the space to display their fists. Analysts generally believe that the U.S. banking industry has already bid farewell to "the darkest moment", but considering the problems of economic fundamentals and regulatory uncertainty, industry, full recovery will take time.
Regain market confidence
Banking business conditions turn for the better and gradually increase the market confidence. U.S. rating agency Moody's has raised 37 investment-grade financial sector's debt rating, while 19 lowered, raised and lowered the ratio of 1.95:1, the highest since the third quarter of 2008 levels. In contrast, Moody's raised only the financial industry in Western Europe five credit rating, lowered 16. This shows again that the market crisis in the U.S. banking industry's worries have been reduced, confidence is stronger than its European counterparts.
Earlier, the U.S. banking CDS is usually higher than the European banks, the most serious financial crisis in October 2008, CDS was higher than the U.S. banking industry in Europe with 341 basis points. But right now the level of the U.S. banking industry has been lower than in Europe with the CDS industry, specifically, Citigroup, JP Morgan Chase and other six leading U.S. major banks have been less than MarkitiTraxx CDS covered by the financial index of 25 European banks and insurance companies.
More than that, many authorities have also released at the end of next year's strategy report recommended configuration financial stocks. Which Goldman Sachs recommended investors overweight financial stocks, and will improve with the economic recovery is expected to demand loans, the financial sector revenue in 2011 is expected to exceed 20%. Goldman Sachs Global Investment department will include a number of large U.S. commercial banks in 2011, the list of recommended holdings.
Find a new growth point
Wall Street has always been a keen sense of smell. Growth in the developed areas gradually slows, the operating conditions of stabilization of the U.S. major financial institutions in emerging markets begin to shift perspective, "the sea" looking for new business growth.
Citigroup recently, says that planning the next 3 years will be opened in mainland China, three times the number of branches increase, reaching around 100, co-CEO of Citigroup Asia Pacific Stephen Bird said it looking forward to China, he said: " For us, the China story has only just begun. "
Citigroup is expanding in China as part of bets on Asian growth. Data show that the third quarter of this year in Asia, Citigroup profit of 10 billion dollars, almost half of all net income.
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