Deposit flows 'most important metric' for US mid and small cap banks in Q1 - JPM

Amalgamated Financial

06/04/2023 12:24

** Deposit flows will be the "single most important metric
to be analyzed" for U.S. mid- and small-cap banks' Q1 earnings,
says J.P.Morgan
    ** Two mid-sized U.S. lenders collapsed last month as
customers rushed to pull deposits leading to bank runs that
marked the biggest meltdown in the banking industry since the
2008 financial crisis
    
    
    ** In terms of bank valuations, brokerage says it is more in
the "fear" side vs "greed" side at current valuations, even
though some argue that banks are attractively priced given the
steep selloff over the past month
    ** S&P 500 Banks index  .SPXBK  down 15.3%, while KBW
Regional Banking index  .KRX  has shed over 20% so far this year
    ** Under its coverage universe, JPM prefers Cullen/Frost
Bankers Inc  CFR.N  going into earnings season and maintains its
"bearish" stance on U.S. mid- and small-cap banks sector
    ** JPM also downgrades Comerica Inc  CMA.N  to "neutral"
from "overweight"
    ** Earlier this week, Morgan Stanley lowered Q1 earnings
expectations for mid-cap U.S. banks citing uncertainty amid a
lack of real-time data on individual bank deposit trends in the
aftermath of a crisis that roiled the sector in March

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U.S. bank deposits    https://tmsnrt.rs/3Ud0fZ8
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 (Reporting by Siddarth S in Bengaluru)
 ((Siddarth.s@thomsonreuters.com))