FINANCIAL INSTITUTIONSSECTOR IN-DEPTH 6 AUGUST 2015TABLE OF CONTENTSBanks Average Market Signals Stable Globally in July 1 Market-implied ratings tables for global banking regions and companies3Monthly Bank Risk Report: key credit metrics: CDS, bonds 4 Appendix : Moodys Capital Markets Research recent publications on the finance sector17ANALYST CONTACTSAllerton G. Smith 212-553-4058 Sr Dir-Sr Research Analyst 250 Greenwich Street allerton.smith@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on Twitter Moodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services orproducts. For further detail, please see the last page.Bank Risk ReportBanks Average Market Signals Stable Globally in July By Allerton (Tony) SmithBenign market conditions prevailed for most banks around the globe in July. The average bond-implied ratings for all regions were unchanged from the end of June. Over the last month, five-year CDS mid-spreads were relatively stable. The USs CDS-implied rating average improved slightly and, for the rest of the world, the regional average CDS-implied ratings were unchanged.The slowdown in China and a sell-off of its markets, the impending default of some debt issued by Puerto Rico (which missed a $58 million payment on August 3), and the back-and-forth over a Greek rescue do not appear to have created much pressure on banks credit spreads. The vast majority of banks around the world have improved balance sheets, little direct exposure to either Puerto Rico or Greece, and are slowly rebuilding profitability.The second quarter held no big shocks for the US banks. Trading revenues at the five major US investment banks slipped modestly (ex-DVA gains) and the most robust performance came from Morgan Stanley with a 30% rise versus a lackluster Q2 last year. For the group, investment banking fees climbed only 2% from Q2 a year ago. For the broader group of US superregional banks, interest income and fee revenues and expenses were all up on a percentage...
