Since the global financial crisis (GFC), financial institutions and regulators have worked to shore up the strength and resiliency of the financial system. A quarterly report from the Securities Industry and Financial Markets Association (SIFMA) provides a snapshot of the current landscape.
Using the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR) firms as a proxy for the system, SIFMA analyzed select income statement, balance sheet and regulatory ratio statistics and trends that show this group of firms has much higher capital levels and healthier balance sheets than during the GFC.
The research report highlights the following trends:
- Income Statement (year-t0-date 2023)
- Total revenue $202.7 billion, +13.6% Y/Y
- Operating expenses $126.7 billion, +6.7% Y/Y
- Net income available to common $48.2 billion, +9.9% Y/Y
- Balance Sheet (1Q23)
- Total assets $18.9 trillion, -0.3% Y/Y
- Net loans $6.9 trillion, +5.5% Y/Y
- Deposits $11.8 trillion, -4.4% Y/Y
- As compared to 2009
- Liquidity 15.5%, +6.7 pps since 2009
- Non-performing loans (NPLs)/Total Loans 0.5%, -2.8 pps since 2009
- Net charge-offs (NCOs) 46.6%, -293.2 pps since 2009
- Regulatory Ratios (1Q23)
- Common Equity Tier 1 (CET1) Capital 11.1%; +2.5 pps since 2009, +0.6 pps above maximum requirement
- Tier 1 (T1) Capital 12.6%; +0.8 pps since 2009, +6.6 pps above requirement
- Data for G-SIBs only
- Supplemental Leverage Ratio (SLR) 6.1%, +0.1 pps above maximum requirement
- Liquidity Coverage Ratio (LCR) 119.9%, +19.9 pps above maximum requirement
- Total Loss Absorbing Capital (TLAC) as % of RWA 32.8%, +14.8 pps above requirement