14. May 2012 16:00
American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.
APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:
26. August 2011 17:51
There’s good news in banking this week. According to a report in the Wall Street Journal, for the first time since 2006 increased lending for the first time in Q2 of 2011. According to the FDIC, the increase was a modest 1 percent from the previous quarter, but it was an increase nonetheless. At the same time, bank profits were down for the second quarter in a row for Q2 ending in June. The FDIC indicates that the lack of profits is due to a lack of loan-worthy customers. (It’s interesting that bank revenues have only fallen in three quarters in the last 30 years.)
According to the report, there were 22 bank failures during the quarter, which is the lowest number since the beginning of 2009. Banks are struggling to find ways to increase revenue from fees and interest payments in order to return to profitability:
"We haven't seen banks' ability to earn money, prior to credit improvements, do much in the last year or so, and the recent changes in interest rates make it even more doubtful that they'll be able to be very successful," said Fred Cannon, director of research at investment bank Keefe, Bruyette & Woods.
The article also reports that banks have higher cash reserves, partly as a hedge against losses but also because they can’t find credit-worthy borrowers for loans. Large banks increased their balances with the Fed by $137.3 billion in the second quarter, an increase of 22 percent over the first quarter.