Eye on Bank ETFs Ahead of Earnings, Bonuses
Michael Johnston submits:The banking industry has been on a wild ride over the past few years, as the unprecedented economic environment of 2008 resulted in a wave bankruptcies and bailouts that many figured would forever change the business. But less than two years removed from the disaster, many financial institutions have staged an impressive return to glory, delivering record profits and approving massive bonuses that have reignited the “Wall Street vs. Main Street” debate. Despite its best efforts to sidestep the spotlight, the banking industry figures to be in focus in coming months as investors digest earnings reports and debate over both responsible and effective compensation policies rages. Despite continued writedowns on real estate operations, the Goldman Sachs and JP Morgans of the world have been boosted by surges in revenues from debt and equity underwriting and trading activities. But now yet another changing economic environment threatens to deal the industry a setback as earnings season gears up. “Analysts are cautioning that fourth-quarter investment banking earnings suffered a significant ‘early Christmas’ slowdown on the back of falling fixed-income revenues,” writes Harry Wilson. “The fall is blamed on a continued drop in market volatility, which has reduced the profitability of credit and rates trading businesses that had been benefiting from record high bid/offer spreads earlier in the year.”Complete Story »
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