NEW YORK, NY — (Marketwire) — 01/02/12 — U.S. Banking shares came under fire from the ratings community in the late stages of 2011 as concerns of meaningful economic expansion and the European debt crisis weighed on the financial sector. The Paragon Report examines investing opportunities in the Regional Banking Sector and provides equity research on Regions Financial Corporation (NYSE: RF) and Synovus Financial Corporation (NYSE: SNV). Access to the full company reports can be found at:
Last month Fitch Ratings said that U.S. government financial support for banks is declining, arguing that future bailouts will likely be restricted to just eight lenders it regards systematically important. Fitch believes the government currently has the framework to wind down large regional banks without using taxpayer funds or disrupting the marketplace.
The Wall Street Journal says that while new global regulations are pushing the banks to hold more capital and pull back risk, Fitch warns the new rules reshaping the industry will reduce profitability. Fitch did note, however, that banks are in a better place than 2008.
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S&P, meanwhile, issued a report suggesting dim prospects for the nation-s banks this year. For 2012, S&P noted constraints on revenue growth as a chief obstacle for U.S. banks. As a crucial source of revenue, growing loan books remains among the most-pressing challenges for the nation-s banks.
“Meanwhile, contagion from Europe-s sovereign debt crisis remains a major concern,” the firm said. Standard & Poor-s credit analyst Rodrigo Quintanilla stated that U.S. banks are dealing with the “greatest structural change since the Great Depression.”
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