And regulatory woes dampen investor appetite for European banks.
From Bloomberg: It’s a good year to be a Canadian banker. The country’s six biggest lenders set aside C$14.3 billion ($11.3 billion) for variable compensation -- up 11 percent from 2016 -- as a record year in trading and investment banking swelled bonus pools. That’s the biggest jump since 2014 and stands in contrast to last year, when a 3.4 percent increase was the lowest since 2010.
From Bloomberg: The Republican tax bill is good news for big banks. At least, it will be once the initial pain wears off. JPMorgan Chase & Co. expects a fourth-quarter “adjustment” of as much as $2 billion largely driven by the firm’s unremitted overseas earnings facing taxation, Chief Financial Officer Marianne Lake said Tuesday at an investor conference. Bank of America Corp. Chief Executive Officer Brian Moynihan said his firm would also take a hit, having to decrease the value of its deferred tax assets.
From Reuters: Uncertainty about the timing and scope of regulatory efforts to strengthen Europe’s financial system is adding to investor caution about increasing exposure to European over U.S. banks, even as the economy and earnings improve. European bank stocks, overshadowed by some 800 billion euros of soured loans from the financial crisis, rallied in the first half of the year after the election of French President Emmanuel Macron removed an element of political risk and data showed the region’s economy recovering at a stronger-than-expected pace.
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