KBRA Releases the Bank Treasury Newsletter and Bank Treasury Newsletter Chart Deck
Kroll Bond Rating Agency (KBRA) releases this month's edition of the Bank Treasury Newsletter and Bank Treasury Chart Deck.
This month's newsletter, Bank Treasurers Vacation at Home, looks at the FDIC's decision to neutralize the loans made under the Paycheck Protection Program (PPP) and bank use of the PPP Liquidity Fund (PPPLF) for purposes of calculating the deposit insurance assessment. The FDIC decision is put in context with other recent decisions by regulators since the onset of the coronavirus (COVID-19) pandemic to smooth the way for the banking industry to participate in the emergency programs set up by the Fed and the U.S. Treasury, in order to aid businesses and households and stabilize capital markets.
A look at the $515 billion balance of PPP loans outstanding in the context of the broader industry balance sheet, shows the heavy inflow of deposits at multiples of loan outflows, and how this trend is contributing to significant pressure on net interest margins, on top of pressures from a flatter yield curve. In addition to margin concerns, bank treasurers list credit as a key worry for the remainder of 2020 and see more reserve build for Q2 2020. Despite these pressures, bank managers continue to defend paying shareholder dividends.
The June edition of the Bank Treasury Newsletter Chart Deck surveys various measures which confirm the success of the Fed's efforts to calm the markets since March. Whle bank treasurers are contending with sizeable inflows of deposits and limited loan demand, the Chart Deck shows how nonfinancial corporations are sitting on the cash proceeds they have raised through longer-term loans and the capital markets.
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About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.