Potential Fixed Income Opportunities in the US Banking Sector

Friday 19 May 2023

Investment Talks

Potential Fixed Income Opportunities in the US Banking Sector

May 2023 | Our assessment is that most banks are much better prepared to withstand financial volatility today than they were in 2008-9. As a result of the systematic application of much greater regulatory oversight, US banks have much higher levels of equity capital, better funding and liquidity, less leverage and much lower asset risk. With the potential for stronger supervision and regulation across the sector, we suggest investors carefully select securities from larger, well-capitalized banks with diversified business models and conservative lending strategies.

01 | Despite alarms of “financial system contagion” highlighted by recent headlines, we believe that recent banking failures are not representative of the industry as a whole.

02 | As a result of the relative attractiveness of issuer yields and spreads, we believe that US global systemically important banks offer compelling, long-term value.

03 | With the potential for stronger supervision and regulation across the sector, we suggest investors carefully select securities from larger, well-capitalized banks with diversified business models and conservative lending strategies.

Potential Fixed Income Opportunities - US Banking Sector

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of May 18, 2023. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.

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