Large banks are still coming to terms with what’s expected from them under the Fed’s annual Comprehensive Capital Analysis and Review, as we learned from the unexpected failures and rejected capital plans. By the same token, analysts are having to adapt their own models to keep up, and Nomura Securities International analysts Steven Chubak and Sharon Leung have recently added two additional parameters to their valuation models, forcing them to reduce some of their major bank price targets.
“Recent discussions with investors have prompted us to consider the potential ROE/capital return implications from CCAR ‘bindingness’—i.e., the possibility that future compliance with minimum [Basel III] targets Setup a free account to get access to this article (no credit card required).Login required to continue reading.
