BankingCash & Working CapitalTalking Shop
November 10, 2022

Talking Shop: How Much Liquidity Does Your Holding Company Maintain?

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected] Member question: “We are a multibillion-dollar bank and have traditionally held cash and liquid securities to cover four quarters of holding company expenses, including opex, debt, preferred and common dividends. We set the upstream dividend from the bank to the holdco to maintain that level every quarter. “After many years of this practice,…
BankingCapital Markets
May 12, 2022

Why Morgan Stanley Sees US Economy Avoiding Recession

Economist Robert Rosener tells bank treasurers that rising wages supporting consumption and continued capex by corporates should keep GDP growth above trend. Not everyone thinks the Fed will push the US economy into recession as it raises rates to fight inflation. Robert Rosener, senior US economist at Morgan Stanley, recently told members of NeuGroup for Regional Bank Treasurers that the firm sees just a 25% chance of recession over the next year. “Avoiding recession is our base case, but markets…
BankingCapital Markets
November 10, 2021

Stars Aligned for Now on Bank Subordinated Debt, Preferred Stock

Morgan Stanley says regional banks should consider moving up offerings to this year given volatility risk. Regional and mid-cap banks are looking to raise capital, whether to refinance existing debt, buy back stock or support balance sheet growth, and the market is hot—at least for now, according to Morgan Stanley bankers presenting at a recent meeting of NeuGroup for Regional Bank Treasurers. But volatility in the aftermath of last week’s Fed meeting could prompt institutional investors to pull back.So banks considering…
July 15, 2021

A Bigger Slice: Bank Boosts Roles of Diverse-Led Firms in Bond Deals

Morgan Stanley shares insights on its approach to partnering with diverse-led firms, including increased fees and mentorship.Morgan Stanley recently shared how it is expanding the role of banks and broker-dealers owned and run by minorities, women and veterans—so-called diversity or diverse-led firms—in self-led bond deals. The insights came during a NeuGroup meeting of bank treasurers sponsored by Morgan Stanley. Many corporates in the NeuGroup network are encouraging banks that underwrite their debt offerings to allocate bonds to diverse-led firms and…
BankingInvestment ManagementTalking Shop
July 15, 2021

Talking Shop: Investing in Collateralized Loan Obligations

Member question: “Have any members considered/evaluated adding to their investment portfolio in the current environment? “While we’ve had CLOs in the portfolio in the past, it’s something that hasn’t been actively pursued in recent years and we are dusting it off for evaluation.” Peer answer 1: “We have been investing in CLOs since Q2, almost exclusively in the AAA space, but we have authorization to do AA. Spreads are tight, but they are a good option to park cash and…
June 24, 2021

Early Innings in the Fintech Disruption Game

A partner at VC firm Canapi Ventures says regional banks can play by helping developing the digital infrastructure. Blockchain-technology firms may be among the best-known disruptors of traditional banking services, thanks in part to the extreme volatility of the cryptocurrencies the technology supports, like Bitcoin. But fintechs take many forms, and the real disruption is still to come. That takeaway surfaced at a recent NeuGroup meeting of bank treasurers that included insights from Jeffrey Reitman, a partner at Canapi Ventures, which…
BankingCash & Working CapitalCOVID-19
May 27, 2021

Too Much Money: Banks Struggle With Surging Deposits

Banks awash in deposits need to prioritize active accounts making use of services that generate fees and revenue.Originating loans as the pandemic recedes and the economy revives is a major challenge for banks today—but so is the surge in deposits since spring 2020 and just what to do with them given the lack of precedent. Consumer and commercial deposits increased by more than $3 trillion, or roughly 20%, since the onset of pandemic through the end of December, according to…