ADD: Citizens Financial Group (CFG) to the Investing Ideas SHORT list.
Commentary below from Keith within "Real-Time Alerts" delivered to #HedgeyeNation today.
Long Healthcare vs. Short Banks Stocks, #reiterated ...
Coaching Notes:
1. My #VASP (Signaling Process) doesn't particularly care "why"... but for those of you who do care on the fundamental component of our fully integrated Research Process, we have Sector Pro products...
2. The following is an example of what Steiner just wrote on both CFG and the Banks:
Takeaway:
Slowing loan growth, both due to planned run-off and weaker demand in retail and commercial banking resulting from historic credit tightening; rising deposit costs; new regulatory concerns around capital requirements; and normalizing credit accelerated by the dual vacancy and refinancing risk associated with general office exposure are plaguing the broader regional banking space.
The earnings impact of higher funding costs will be amplified by increased conservatism through tighter underwriting and shifting asset mix targeting higher precautionary levels of liquidity.
Despite our continued view that this is indeed a well-run bank, as evidenced by the prudent run-off of its auto and unsecured personal installment loan portfolios, Quad 4 gravity historically imposes itself indiscriminately across the regional banking industry. We recall management's comments from the 4Q21 earnings call in which macro was appropriately cited as the the principal risk to its outlook, particularly around the Federal Reserve's delicate balancing act of controlling inflation and not harming the expected trajectory of real economic growth.
KM
