New Round of "Stress Tests" Focused on the Handling of Major Recessions in China and Europe
November 20, 2012 08:20 ET
New Round of "Stress Tests" Focused on the Handling of Major Recessions in China and Europe
Five Star Equities Provides Stock Research on Fifth Third Bancorp and KeyCorp
NEW YORK, NY--(Marketwire - Nov 20, 2012) - Despite the global economy experiencing a major slowdown financial stocks have shown investors some pretty admirable gains. The Financial Select Sector SPDR ETF (XLF) has gained 17.5 percent year-to-date, nearly 6 times the Dow Jones Industrial Average gain of 3 percent over the same period. Five Star Equities examines the outlook for companies in the Regional Banking Industry and provides equity research on Fifth Third Bancorp (
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[ www.FiveStarEquities.com/KEY ]
Last week the Federal Reserve announced guidelines for the latest round of "stress tests," which they expect to release results for by late by 2013. The latest tests will focus on how the nation's 19 largest banks would handle major recessions in Europe, China and Japan. The passing of the "stress tests" are considered key as it enables large banks to increase dividends and share buybacks.
"For the majority of banks, we view the scenarios laid out for [the capital analysis and review for] 2013 as modestly more optimistic as the one used in 2012," Barclays analyst Jason Goldberg said. There will be a number of banks that "will return the majority of their 2013 net income to shareholders in dividends and buyback next year," he said.
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Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio, with $117 billion in assets. Fifth Third is among the largest money managers in the Midwest and, as of September 30, 2012, had $300 billion in assets under care. Shares of the company have gained over 10 percent year-to-date.
KeyCorp is one of the nation's largest bank-based financial services companies, with assets of approximately $87 billion. The company has recently declared a cash dividend of $0.05 per common share for the fourth quarter 2012, for an annual yield of approximately 2.5 percent. Shares of Keycorp have gained 5 percent year-to-date.
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