Scale in banking is mostly a funding advantage
It traded at 334.88, -0.41% today. The largest banks are not better lenders. They borrow more cheaply, and that is enough.
Regional banks, NIM, credit normalisation, and the payments stack. Balance-sheet risk in plain English.
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It traded at 334.88, -0.41% today. The largest banks are not better lenders. They borrow more cheaply, and that is enough.
Regionals traded at 75.26, +0.98% on the session. Funding costs are the whole story and they are the part least discussed.
When rates fall, lending margins compress. The fee businesses of a large bank move on different drivers entirely.
A card network earns a little on every domestic transaction and a lot more when the card crosses a border.
What the premium multiple assumes about credit, and where I think it is stretched.
Processing volume is growing fastest where the company is least visible to the customer, and that is where margins are thinnest.
The peer-to-peer app has the users and the habit. What it has never had is a revenue line that matches its popularity.
A large bank that bought long bonds when yields were low has been carrying a drag. Every bond that matures and is reinvested lifts it a little.
The branded volume and take-rate thresholds behind my view.