When RBS floated Citizens Financial in 2014, it was the biggest bank IPO since the financial crisis and investors were sceptical of its prospects ‒ five years on and RoE and EPS have doubled, the stock trades at a premium, and the bank has shown it can compete with bigger US banks and non-banks alike.
The dynamics of the US securitization market have changed beyond recognition, while the role of banks in ABS has evolved too; the excesses of the past have gone and securitization is now a safe and reliable funding tool for consumer lending.
A deep and sustainable private-label RMBS market has always eluded the US thanks to the insuperable competitive advantage enjoyed by the GSEs; that could change if plans to remove these guarantees for higher-risk mortgages go ahead.
Additional tier-1 (AT1) securities and contingent convertible capital instruments, known as CoCo bonds, absorb losses when the capital of the issuing financial institution falls below a supervisor-determined level.
Euromoney's latest coverage of how Beijing is seeking to globalize the renminbi, through currency swaps and trade-financing facilities; the rise of the offshore bond market; and how fee-hungry banks are salivating at the prospect of the RMB’s growth.