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Innovest Invites You to Join Our Webinar: Consumer Finance at the Tipping Point
Innovest Invites You to Join Our Webinar: Consumer Finance at the Tipping Point
Published 09-23-08
Submitted by Innovest Strategic Value Advisors, Inc.
- September 23, 2008 - Please join Innovest on Monday 29 September when we will discuss current trends in consumer finance.
In this webinar we will examine Bank of America, American Express, Discover, Citi, Capital One and JP Morgan Chase. We have benchmarked each bank by its product exposure to subprime / high risk consumers, identified winning and losing strategies, and looked at balance sheet and earnings sensitivity to credit card performance.
What Wall Street and the Federal government are diagnosing as a mortgage problem is, in fact, a symptom of a deeper crisis of deteriorated consumer financial health. For nearly a decade Americans have been taking on more debt while their savings and real wages have declined. (Figure 1 and 2).
Figure 1: Source: Federal Reserve, FDIC, Innovest
Figure 2: Source: USBEA, Federal Reserve, Innovest
Mortgages were the first victim of this credit deterioration. We believe credit cards will be next:
- New credit card issuance will slow down as banks rebuild their balance sheets. This will make it difficult for distressed borrowers to roll bad debts into new low-interest cards.
- The mortgage crisis is putting unprecedented strain on borrowers. In the second quarter, credit card issuers in states hit hardest by the mortgage crisis saw the sharpest spikes in credit card net charge offs.
- The 2006 bankruptcy reform will cause credit card charge offs to be delayed. Today's low charge off rates are only the calm before the storm: delinquencies will begin to fully register as charge offs in early 2009.
- Credit card usage has spiked because expenditure which used to be charged to home equity loans is now charged to credit cards. We anticipate a commensurate surge in bad credit card debts.
The webinar will take place on September 29th, 2008:
4:00pm: Amsterdam, Brussels, Paris, Frankfurt, Geneva & Vienna
3:00pm: London
10:00am: New York & Toronto
To register for the webinar, please click here.
About Innovest
Innovest Strategic Value Advisors is an internationally recognized investment research and advisory firm specializing in analyzing companies’ performance on environmental, social, and strategic governance issues, with a particular focus on their impact on competitiveness, profitability, and share price performance.
Innovest currently has offices in New York City, Toronto, San Francisco, London, Paris, Sydney, and Tokyo
Innovest Strategic Value Advisors, Inc.
Innovest Strategic Value Advisors, Inc.
Innovest Strategic Value Advisors is an internationally recognized investment research and advisory firm specializing in analyzing companies’ performance on environmental, social, and strategic governance issues, with a particular focus on their impact on competitiveness, profitability, and share price performance. Innovest currently has offices in New York City, Toronto, San Francisco, London, Paris, Sydney, and Tokyo.
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