蘑菇AV

Regional banks are holding out for lower interest rates to spur loan demand and alleviate deposit costs.

The Philadelphia-based lender had planned to exit the mortgage business after struggling under the weight of higher interest rates

A lawsuit alleges it issued the wrong loans and is forcing repayment for what should be forgiven. BofA will likely blame government pressure to move quickly.

Smaller loan provisions and huge net interest income gains hint that banks will likely be resilient through an economic downturn.

A Groundhog鈥檚 Day scenario will repeat Q3. Profits have plummeted, investment banking has dried up, and banks continue prepping for loan losses.

On the first podcast episode of the new year, we discuss what buy now, pay later's (BNPL鈥檚) prospects will look like in 2024. 鈥� In our 鈥淪tory by Numbers鈥� segment, we focus on the outlook for BNPL by looking at growth by generation. 鈥� In 鈥淗eadlines,鈥� we examine data from Adobe Analytics that states BNPL purchases were up 43% on Cyber Monday compared with the previous year, and how the rise of BNPL use over the holidays has increased consumers' debt burden. 鈥� In 鈥淔or Argument鈥檚 Sake,鈥� we debate whether BNPL promotes good or bad behavior. Listen to the podcast with host Rob Rubin and our analysts Grace Broadbent and David Morris.

Economic uncertainty is making it hard for some to keep up: Prolonged inflation, financial stress, and rising debt are making for a challenging environment.

They were aided by high interest rates and low loan delinquencies. But this year, the effects from persistent inflation and the failed mini-budget still lurk.

Cheaper loans: FIs will likely lower interest rates on personal loans, credit cards, and small-business loans, potentially boosting demand for credit products. Narrowing margins: As lending rates decrease, the spread between what banks pay on deposits and earn on loans shrinks, squeezing profits. Mortgages:.

On today鈥檚 podcast episode, we discuss how banks are adjusting their ad spending in a world with high rates, economic turmoil, and a shift to digital advertising. 鈥� In our 鈥淗eadlines鈥� segment, we dig deep on a recently published Insider Intelligence report covering our forecasts for ad spending by US banks and credit unions. 鈥� In 鈥淪tory by Numbers,鈥� we discuss how fewer mortgages are affecting banks' net interest income and what that means for their marketing budgets. We also examine Ally Bank鈥檚 increased ad spending. 鈥� In 鈥淔or Argument鈥檚 Sake,鈥� we talk about how large banks are doubling down on digital ad spending while smaller institutions are cutting their spending, which could lead to the eventual demise of smaller traditional banks. Tune in to the discussion with host Rob Rubin and our director of forecasting Oscar Orozco.

As retail media evolves, ad placements off-site and in-store will help grocery advertisers reach shoppers in new and more engaging ways, but consumers may not be in a spending mood as credit card balances grow and savings accounts shrink. If Amazon can get grocery right, it may be able to fight off losing share to Walmart. But if the Kroger-Albertsons merger goes through, it could change everything.

Spending was consistent with prior quarters in 2022. But consumers may struggle to pay down card debt if economic headwinds pick up in 2023.

On today鈥檚 podcast episode, we explore the problematic relationship between credit unions and Gen Z. 鈥� In our 鈥淗eadlines鈥� segment, we discuss an article from PYMNTS.com that revealed only 4% of Gen Z consumers bank with credit unions. 鈥� In 鈥淪tory by Numbers,鈥� we consider what credit unions can do to capture Gen Zers鈥� attention while working with tight marketing budgets, and which programs have helped Gen Z consumers manage their finances. 鈥� In 鈥淎ctual CEO,鈥� we discuss with our guest CEO what she is currently doing to engage with Gen Zers at her credit union. Listen to the podcast with host Rob Rubin and Tansley Stearns, CEO of Community Financial Credit Union.鈥� In our 鈥淗eadlines鈥� segment, we dig deep on a recently published Insider Intelligence report covering our forecasts for ad spending by US banks and credit unions. 鈥� In 鈥淪tory by Numbers,鈥� we discuss how fewer mortgages are affecting banks' net interest income and what that means for their marketing budgets. We also examine Ally Bank鈥檚 increased ad spending. 鈥� In 鈥淔or Argument鈥檚 Sake,鈥� we talk about how large banks are doubling down on digital ad spending while smaller institutions are cutting their spending, which could lead to the eventual demise of smaller traditional banks. Tune in to the discussion with host Rob Rubin and our director of forecasting Oscar Orozco.

Instagram鈥檚 Threads updates after dwindling usage, X delays payouts amid other debts, and TikTok modifies its EU algorithm due to the Digital Services Act.

US consumers are already carrying record household debt. They鈥檙e wary of incurring more debt, which has contributed to a narrowing demand for loans and forced consumers to seek alternative options. Nonbank competitors have secured much of the mortgage market.

But HSBC will retain debt capital markets, leveraged finance, real asset finance, and infrastructure finance in these same regions, as they have stronger market positioning. The gap: Global investment banking accounted for just 6.2% of HSBC鈥檚 net income in H1 2024, per CNBC鈥攊llustrating the relatively small size of the business impacted.

AI compliance challenges: Banks are increasingly adopting AI for high-stakes operations like loan approvals, which is exposing them to more third-party risk. Banks must ensure their AI is explainable and compliant to stay ahead of regulation and avoid potential discrimination issues.

The details: The study found that 76% of Gen Zers in India prefer stable investments like fixed deposits, prioritizing security over high-risk returns. 73% of Gen Z respondents listed debt and unexpected losses as their top concerns. 70% of Gen Z banking customers are focused on five-or-more-year investment horizons. 68% opt for dual-benefit investments that balance security with growth potential.

The BNPL provider added a credit opt-out feature to help prevent consumers from going further into debt

Outstanding US credit card balances totaled $1.17 trillion in Q3 2024, up 8.1% YoY, per the Federal Reserve. Consumers collectively paid $170 billion in interest during the 12 months ending in September, per BankRegData. How did delinquencies fare? Taken together, delinquencies didn鈥檛 paint a clear picture of meaningful improvement鈥攐r backsliding.

Making it easier for community banks to attract capital鈥攚hich could boost relationships with their SMB customers who must sometimes turn to their competitors for loans. Expanding eligibility for 鈥淪ubchapter S鈥� tax status to help banks reduce tax burdens. Supporting stronger collaboration between community banks and fintechs to enhance innovation and competition.

Exiting the credit card business was part of Ally鈥檚 larger restructuring, in which it also ended mortgage originations and laid off about 5% of its staff. Why this matters: Ally鈥檚 card program targets consumers with middle to low credit scores. This was becoming a problem for Ally given this consumer segment faced the brunt of financial stress from stubborn inflation and high interest rates.

Debit offers real-time tracking of how much consumers have in their accounts and can help prevent overspending, making it especially popular among debt-conscious consumers. And even frequent credit card users gravitate toward debit cards for smaller transactions and everyday purchases like groceries.

And then understanding how much people are in debt probably. It's two things together, savings and debt. And then what I thought is frightening 'cause every retailer is also reading the news, right? And the New York Fed Reserve has this survey since 2015 that has a question around how likely are you to be able to absorb a $2,000 bill that you were not anticipating and that rose to 62.

Comply with lending laws for profit-generating overdraft loans, including clear interest rate disclosures. How we got here: While most financial regulators have paused their agendas during the transition to President-elect Donald Trump, the CFPB maintains a 鈥渂usiness as usual鈥� approach.