Insights: Notes from the Field

Notes from Texas: Lone Star Shines Bright

On a recent investor roadshow to Texas, we had the opportunity to meet the top management of ten Texas headquartered U.S. banks. The Texas economy is booming (annualized real GDP grew +5.2% yoy in Q4/17 making it the fastest growing economy of all 50 U.S. states) driven by a robust recovery in the energy sector and strong labor market trends in an increasingly diversified economy. With…

Global Exchanges and E-Brokers: favourable secular and cyclical themes

We met the management of over a dozen global exchanges and e-brokers at a recent conference in New York. Global exchanges and e-brokers have benefitted from secular, regulatory and cyclical tailwinds over the past decade, which has resulted in robust earnings growth and driven strong stock outperformance.  The Hamilton Capital Global Financials Yield ETF (HFY) which is outperforming its benchmark by 270 bps since inception and has a…

Notes from Spain: Improving Backdrop for the Banking Sector

On a recent trip through Madrid, Spain we had the opportunity to speak to most of the publicly traded Spanish banks, as well as the Bank of Spain. The Hamilton Capital Global Bank ETF (HBG) which is outperforming its benchmark by 14.4%, has ~3% exposure to Spanish banks, while the Hamilton Capital Global Financials Yield ETF (HFY), which is outperforming its benchmark by over 6%, has…

Notes from the Field: “Follow the Sun” / Catching up with U.S. Banks in Phoenix

One of our themes for the U.S. banks is to “follow the sun”, which refers to our emphasis on banks domiciled in the higher population growth states/metropolitan statistical area[1] (“MSAs”). Every single one of the 15 faster growing large MSAs (i.e., those with populations in excess of 1.5 million people) are located in the (sunny) Southeast, Southwest, and West.

Notes from Italy: Economic Recovery and NPL Progress Improving Confidence

We recently traveled to Milan and met with representatives from Italy’s three largest banks. These banks have combined assets of ~€1,800 bln, loans of ~€960 bln, and market caps of ~€85 bln. We also recently traveled to the U.K. and had the opportunity to meet with the 4th and 5th largest Italian banks while there. Despite a challenging 2016 in terms of market returns, the stock…

Notes from the Field: Everything’s Peachy in Atlanta

A recent trip to Atlanta gave us a chance to meet with executives from several publicly traded banks headquartered in Georgia, as well as some of their commercial customers and a local land broker. Seven months after the election of an administration with ambitions of pro-growth policies and reforms that renewed investor interest in U.S. bank stocks, the trip presented a good opportunity to check in…

Notes from the Field: At Home with the Challengers of U.K. Banking

During a recent trip to London, we had the opportunity to sit down with executives from six UK-based banks, including teams from two High Street banks and four from what are commonly referred to as “Challenger banks”.  In this note, we review our stance on U.K. banks, provide a brief breakdown of the market, and discuss our key takeaways from the trip.

Notes from the Field: U.S. Mid-Cap Bank Meetings in New York

We recently attended a U.S. financial services conference in New York City and had the opportunity to meet with executives from seven mid-cap banks. These meetings were of particular importance to us, as the Hamilton Capital Global Bank ETF (HBG) has ~46% of NAV invested in the U.S., with the majority of that in banks with less than US$50 bln in assets. Given the relatively low…

Notes from Florida Bank Tour: Commercial Real Estate Lending and M&A under the Microscope

We recently traveled to Florida to meet with a group of mid-cap banks. Of the 12 banks that participated on the trip, 9 are headquartered in Florida (2 Arkansas, 1 from New Jersey), and 10 are publicly-traded[1]. Of the publicly-traded banks, the median asset size is US$5.0 billion, the median market cap is US$841 million (US$1.5 billion average), and the median expected loan growth in 2016…

Notes from NYC: For Global Investment Banks, Legacy Issues and Volatile Markets Creating Challenges

Along with a group of other investors, we recently attended meetings in New York City with executives from global banks (7 banks, including 6 international). Many of the conversations were focused on the investment banking businesses of these firms and how they are dealing with structural changes to the business model and regulatory environment, which are contributing to the ongoing headlines highlighting the challenges facing the…

Notes from Florida: KBW Financial Services Symposium

In early February we attended the KBW Winter Financial Services Symposium in Florida, which was attended by other investors and representatives from U.S. banks and capital markets firms. Of the +70 primarily U.S. mid-cap banks in attendance, only five had assets over $50 bln. There was a clear division in sentiment between company executives, who are not seeing major issues with their operations, and investors, who…

Notes from the Field: BofAML Insurance Conference 2016

We recently attended Bank of America Merrill Lynch’s 2016 Insurance Conference in New York, where we took in presentations by 27 insurance companies, with representatives from the life, property and casualty (P&C), reinsurance and mortgage insurance sub-sectors. Most of the companies presenting were U.S.-based (and listed), with several Bermuda and Europe-domiciled reinsurers, and a Canadian P&C insurer also in attendance. Notwithstanding the location of their headquarters,…

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