U.S. banking turmoil is not over yet, and it’s expected that a large-scale restructuring would take place in the U.S. banking sector, said Tianyang Wang, associate professor in the Department of Finance and Real Estate at Colorado State University.Many medium-sized and small banks won’t survive the loss of deposits and some of them have to be acquired by big banks at low prices, said Wang during a recent webinar.U.S. banks are paying more to hold on to deposits, setting aside more reserves for potential loan losses in the event of a potential recession, and are now more focused on building capital rather than returning it to shareholders in the form of dividends and buybacks, said a research note by Swiss banking giant UBS.The highly anticipated Q1 results from U.S. banks did not raise any new red flags about stresses in the banking system, largely putting to rest concerns about systemic risks, said the UBS.The UBS said it remains least preferred on financials stocks and continues to expect guidance and estimates to trend lower in the coming quarters as deposit pricing issues become more apparent and as the economy weakens.
SANGHA KOMMUNE (SSR) 