As investors have grown more comfortable with the economic outlook for 2021 and the credit outlook for banks in this year and beyond, more conservatively-positioned banks haven't fared as well. Like M&T Bank (MTB), People's United Financial (PBCT) has been a bit of a laggard recently, and for largely the same reasons - weak near-term pre-provision growth prospects and likely more limited opportunities to supplement organic growth opportunities with advantageous M&A.
I think People's United management is doing about the best that can be expected right now, and I'll be curious to see what the bank's new "Business Transformation Office" can achieve in terms of customer service enhancement and longer-term share gains. This is still a bank with a good credit culture, a diversified business mix, and a good M&A history, not to mention a healthy dividend, but with near-term growth challenges and a long-term core growth rate likely to be around 4% to 5%, this looks more like an "okay" idea than a compelling buy.
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Weak Spreads And Loan Growth Hamstringing People's United Financial
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