SOURCE: Paragon Financial Limited
NEW YORK, NY--(Marketwire - Aug 28, 2012) - The major banks continue to outperform the market this year despite growing concerns of a global economic slowdown. The Financial Select Sector SPDR Fund (XLF) -- which seeks to replicate an index comprised from diversified financial services - is up nearly 16 percent year-to-date as investors jump back into the sector after a major selloff in 2011. The Paragon Report examines investing opportunities in the Banking Industry and provides equity research on Bank of America Corp. (NYSE: BAC) and U.S. Bancorp (NYSE: USB).
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Recent data from the Federal Reserve has shown that the gap between U.S. bank deposits and loans has expanded at the fastest pace since May 2010. For the two month period ended July 31 deposits have gained 3.3 percent to $8.88 trillion, while business lending has risen 0.7 percent to $7.11 trillion. Since May the gap has grown by 15 percent. Banks treasury purchases of $136.4 billion this year, an all-time high, are already double last year's total of $62.6 billion.
"Bank deposits continue to explode and in turn they continue to buy Treasuries as the economy loses momentum, inflation is trending down, Europe continues to hang over our heads and political uncertainty reigns" said Michael Mata, a money manager for ING Investment Management Americas. "There is no reason for interest rates to climb in any meaningful way any time soon."
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Bank of America earlier this month announced national availability of its online and mobile cash back deals program, BankAmeriDeals. With a simple click of a button or tap on the screen, customers choose the deals they want through Bank of America's Online Banking and Mobile Banking app. "Our customers continue to tell us how important it is to save money while they shop," said Aditya Bhasin, Consumer Marketing and Online and Mobile executive.
U.S. Bancorp, with $353 billion in assets as of June 30, 2012, is the parent company of U.S. Bank, the fifth-largest commercial bank in the United States. The company reported record earnings in the second quarter driven mostly by an 8.1 percent year-over-year increase in total net revenues.
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