Financial Services: Investment Services Competition Is Heating Up
The economy remains relatively strong, but we’re seeing pressure in funding costs, net interest margin growth, and credit costs.
Quarter-End Insights
Mentioned: Australia and New Zealand Banking Group Ltd (ANZ)
, Commonwealth Bank of Australia (CBA)
, National Australia Bank Ltd (NAB)
, Westpac Banking Corp (WBC)
, Prudential PLC (PRU)
, China Merchants Bank Co Ltd (600036)
, Industrial And Commercial Bank Of China Ltd (601398)
, Bank Of China Ltd (601988)
, Aviva PLC (AV.)
, Assicurazioni Generali (G)
- We assess the global financial-services sector as approximately fairly valued. It has recently traded at a market-cap-weighted price/fair value estimate ratio of 0.96--a 4% discount to what our analysts believe the sector is worth.
- While the economy remains relatively strong, increased competition among banks shown in rising funding costs are slowing net interest margin growth, and uncertainty regarding credit costs is increasing.
- There is a general easing of financial regulation in the United States, but signs of tightening in China, Australia, and Europe.
- Strategic moves in the United States' investment services industry heated up in the third quarter.
Americas Financials Update
By Brett Horn, Eric Compton, Greggory Warren, and Michael Wong
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Michael Wong does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.