Financials Unshackled Issue 11: Weekly Banking Update (UK / Irish / Global Developments)
Perspectives & Snippets on UK / Irish / Global Banking Developments
The material below does NOT constitute investment research or advice - please scroll to the end of this publication for the full Disclaimer
Good evening - and welcome to the latest edition of Financials Unshackled! This issue covers perspectives (and snippets) on select developments from the weekend and the past week in a UK, Irish, and a Global Financials context. Any feedback on the note is most welcome - and you can reach me directly at john.cronin@seapointinsights.com.
What’s in this note:
Calendar for the week ahead
UK sectoral developments (BoE lender surveys; mortgage rate developments; windfall tax risks; deferred bonuses and clawbacks; savings rate developments)
UK company developments (HSBC preparing to merge commercial and investment banking units?; Monzo US$5.9bn valuation; HMT shareholding in NWG falls below 16%; MTRO Board Update; TSB fined £10.9m; SUS reports material y/y decline in PBT in 1H24)
Ireland developments (CBI retail interest rate updates; perspectives on bank margins; Monzo injects €4m into Irish subsidiary - and why Ireland?; ICS launches bridging finance proposition; Fexco Financial Services CEO interview; banks podcast on That Great Business Show)
Global developments (BBVA Chair on why scale is needed to counteract disruptive threats; will Unicredit stakebuilding catalyse cross-border M&A?; BIS thoughts on how liquidity supervision may need to evolve; AT1 spreads over Tier 2 spreads at record lows; ECB Executive Board Member Frank Elderson interview; ECB Supervisory Board member Elizabeth McCaul speech)
Calendar for the week ahead:
Firstly, here is what to watch for in the week ahead in what looks to be a very quiet period for scheduled updates before UK bank earnings season kicks off the following week:
Thu 17th Oct (12:45 BST): ECB Monetary Policy Decision (Press Release following the ECB Governing Council Meeting)
UK Perspectives & News Snippets:
Select UK Sectoral Developments Update
Findings of BoE lender surveys consistent with modest loan originations growth and soft pricing pressure in late 2024
The Bank of England (BoE) published its quarterly Credit Conditions Survey (click here) and its quarterly Bank Liabilities Survey (click here) for Q3 2024 (i.e., the three months to end-August 2024) on Thursday 10th October. These are important surveys - which were conducted between 27th August and 13th September - as they give a sense of lenders’ expectations for the months ahead.
Overall synopsis:
Survey findings are consistent with lenders guidance for modest net loan growth expansion in the months ahead (accounting for maturities) though some caution appears to be prevailing in a credit supply context until the outcome of the 30th October Budget is known. While we will likely see some marginal contraction in lending and deposit spreads owing to competitive mortgage market conditions (modestly impactful) and as deposit pricing changes lagging base rate changes (slightly more impactful), this should be a largely temporary phenomenon as liability margin benefits eventually begin to materialise in the declining official rate backdrop (and, for what it’s worth, I don’t expect the TSC or the FCA to ‘pile on’ any meaningful incremental pressure on the deposit pricing front). In any event, there is nothing in the surveys that should cause concerns in relation to pre-existing lender net interest margin (NIM) guidance (with the overall tone expressed by the mainstream lenders at the recent Barclays and BoA conferences indicative of, perhaps, some marginal upside relative to expectations through 3Q) especially given the highly impactful effects of structural hedge rollovers.
The detail - BoE Credit Conditions Survey:
Household Mortgages: 1) Supply: Availability increased in Q3 and is expected to be unchanged in Q4 (i.e., the three months to end-November). 2) Demand: Unchanged in Q3 and expected to increase in Q4 for house purchases. Reduced in Q3 and expected to increase in Q4 for remortgaging. 3) Spreads: Slight widening observed in Q3 but expected to narrow in Q4 (more perspectives on this below). 4) Defaults: Increased in Q3; expected to increase again in Q4 (albeit I would add that defaults are running at very modest levels).
Household Unsecured Lending (Credit Cards & UPLs): 1) Supply: Slightly increased in Q3; expected to increase in Q4. 2) Demand: Unchanged in Q3; expected to decrease slightly in Q4 (suggestive of a marginal tightening in credit risk appetite given uncertainties ahead of the Budget rather than related to any observed adverse shift in macro conditions in my view). 3) Spreads: Widened in Q3; expected to widen further in Q4 (notably the length of interest-free periods on new credit cards for purchases increased in Q3 and was expected to increase slightly in Q4). 4) Defaults: Slightly reduced in Q3; expected to be unchanged in Q4.
Corporate Lending: 1) Supply: Unchanged in Q3; expected to be unchanged in Q4 (notably, in Q3, credit availability for small businesses was unchanged while credit availability for medium and larger-sized businesses increased slightly). 2) Demand: Unchanged in Q3; expected to decrease slightly for small businesses, increase slightly for medium-sized businesses, and increase for large businesses in Q4. 3) Spreads: Unchanged in Q3 on loans to small and medium-sized businesses; expected to remain unchanged in Q4. Narrowed for large businesses in Q3 and expected to narrow slightly in Q4. 4) Defaults: Unchanged in Q3; expected to be unchanged in Q4.
The detail - BoE Bank Liabilities Survey:
Retail deposit volumes increased in Q3. The growth emerged from household deposit growth (with household deposit volumes expected to increase slightly in Q4) while private non-financial corporations (PNFCs) deposit volumes were unchanged in Q3 (and expected to reduce in Q4).
Retail deposit spreads increased in Q3. Retail deposit spreads are expected to increase further in Q4. My own sense is that, were the survey to be rolled forward for a few more quarters, the expectation would be that spreads will narrow (following natural initial widening in a declining official rate backdrop) given time lag effects in the context of the passthrough of lower official rates to deposit customers.
Demand for wholesale bank debt from UK and overseas investors rose in Q3 and is expected to remain unchanged in Q4.
Mortgage rates starting to drift back up
Despite Andrew Bailey’s well-documented comments in an interview with The Guardian on 3rd October last (click here), which were quickly softened by BoE Chief Economist Huw Pill (click here), swap rates have begun to pick up in recent days (with, for instance, 2Y swap rates at the c.4.05% mark on Friday versus <3.90% a week previous) as the markets become a bit more concerned about higher government borrowing costs ahead of the Budget. While (short-term persistently) higher swap rates typically take a couple of weeks to become fully reflected in loan pricing, we have begun to see some significant lenders like Barclays UK, Coventry Building Society, and Santander UK take action to increase rates / withdraw some of their attractively priced offers already.
Rightmove’s latest weekly tracker on UK mortgage rates (click here) shows a continued trend of slightly reduced mortgage pricing in the six days to Tuesday 8th October, with: i) average rates on 2Y/5Y fixed rate mortgages at 75% LTV down by 2bps/2bps week-on-week to 4.64%/4.35%; ii) average rates on 2Y/5Y fixed rate mortgages at 60% LTV down by 5bps/1bp week-on-week to 4.10%/3.88%. This is unsurprising given the moves by many major lenders to trim rates during the prior week (i.e., the week beginning 30th September) but I would expect we will see a marginal uptick in average rates in next week’s Rightmove data as lenders increasingly seek to reflect higher swap rates in mortgage pricing (although, clearly, a lot can change in a short space of time in an outright pricing context). Indeed, the most important point from a UK bank investor perspective, is how spreads evolve and the seemingly disciplined approach to pricing in response to evolving swap rates points to a broadly stable mortgage spread environment over time as far as I see it right now - which is consistent with the sentiments expressed by the Lloyds (LLOY) CFO and the NatWest Group (NWG) CEO at the BoA Financials conference on 25th September last (click here for more detail).
Bankers caution against windfall taxes
CityA.M. reported on Wednesday (click here) that senior bankers have been privately warning government figures, ahead of the 30th October Budget, that tough regulation and high taxes are adversely impacting upon investor sentiment towards the UK financial services sector. Hardly surprising that a lobbying effort is going on but it should give the Chancellor pause for thought given: i) the high taxes that UK banks already pay relative to the position in other countries (notably, total tax receipts from financial services firms amounted to £110.2bn in the 2022/23 tax year (according to a report from PwC - click here), +27% on the total amount collected in the 2015/16 tax year); and ii) the degree of concern of institutional investors in relation to potentially higher bank taxes (the surveys run at the recent Barclays Financials conference highlighted these concerns). Separately, the Chancellor was due to meet the CEOs of the top 5 UK banks on Wednesday last (according to Sky News - click here) and while there has, unsurprisingly, been no leakage of what was discussed, one can rest assured that taxes were high up on the bankers’ agendas. Fears have mounted within the industry since Starmer remarked that, in a bid to bolster the public finances, the burden should fall on those with “broadest shoulders” (click here).
So, to recap, what are the options if the Labour Government is determined to impose higher taxes on the sector? Firstly, and the most likely direction of travel in my view, is a modest increase in the bank CT surcharge. This is currently levied at 3% on profits in excess of £100m - and was reduced from 8% to 3% by the then Sunak Government in 2021 (click here) in a bid to offset the impact of the increase that the Conservative Government applied to corporation tax rates (click here). Secondly, it is a possibility that the UK could follow in the footsteps of measures applied to other industries (e.g., energy) or what overseas governments have done in the form of windfall taxes. Finally, Labour could meddle with the reserves remuneration regime, i.e., reducing the interest rate paid to lenders on the reserves they hold at the BoE (aka ‘deposit tiering’) - however, this brings other widespread complications as Andrew Bailey, BoE Governor, identified in a critical speech on the topic on 21st May 2024 (click here). Indeed, it is also worth noting that the FT reported on 12th June last (click here) that Rachel Reeves (in her then shadow Chancellor capacity) noted that Labour has no plans to interfere with the reserves remuneration regime (and, for what it’s worth, I believe she will stick to her word on this with her comments to the newspaper indicating that she understands some of the nuances involved): “We have no plans to do that. And actually the paying of interest on reserves is part of the transmission mechanism for monetary policy, it’s one of the ways that higher interest rates filter through to the real economy”. While the lobbying effort will continues, I suspect that will not be enough to stop the Government from extracting more rent from the sector given it is in such strong shape. All eyes on next week’s developments and my view is that we will see a modest increase in the surcharge and my bet is on 5% (up from 3%) as I think Labour will be reluctant to ‘go harder’ (I reckon they have been tempted to ‘go the full hog’ back to 8% but the lobbying effort will have helped temper that in my view) - and, for clarity, I expect the £100m allowance (before it becomes payable) to remain unchanged.
Snippets
Push for a softening in the regulatory regime around deferred bonuses and clawbacks: Continuing with the political / regulatory theme, it was interesting to read Laura Noonan’s piece on Bloomberg on Wednesday last around how the largest UK banks are lobbying regulators to soften their stance on deferred compensation (part of senior bankers’ pay can be deferred for as long as seven years) and clawbacks (which can last up to a decade) given the strictness of the UK regime relative to other jurisdictions in this respect. Click here for the story.
Savings rates continue to decline: Moneyfacts reported on Wednesday that short-term bond rates continued to fall m/m based on early October rates but noted that the most competitive 3Y and 5Y fixed savings account rates remained stable m/m at 4.72% and 4.64% respectively at the start of October (click here but note that the data in this link is updated weekly). Separately, This is Money picked up on the Moneyfacts data and it’s worth clicking here to access some of the tables if you don’t have a Moneyfacts subscription to access the dataset.
Select UK Company Developments Update
HSBC said to be preparing to merge commercial and investment banking units
The FT reported on Thursday that preparations for a merger of HSBC’s commercial and investment banking (GBCM) business units are understood to be at an advanced stage (click here) and that an announcement on the merger is expected before the end of the month (notably HSBC is due to report 3Q24 results on Tuesday 29th October, which seems to me to be the most likely timing for an update on strategic cost (and other) actions under its new leadership). The newspaper reported that, according to a source who is familiar with the draft plans, this merger would see a significant culling of senior banker staff - which is not surprising.
Media reports first surfaced in early September (click here) in relation to such a possible combination. It is understood that the primary motivator underpinning this possible move is cost reduction - and that news of a possible combination in early September followed media reports in relation to the new CEO Elhederey’s focus on taking an axe to middle management layers (with cost rationalisation reportedly at the top of his agenda). A previous proposal to combine the units met with heavy internal resistance and was shelved - with Covid also getting in the way here. While it could be argued that such a decision could drive greater unity within the bank in the longer-term by virtue of a more streamlined client and product proposition (which was, effectively, the rationale offered by JPM when it effected such a combination recently), it would likely be highly disruptive in a nearer-term context - and the delivery of any expected benefits would clearly be highly dependent on a smooth integration process as well as the right leadership choices being made for the merged unit. Still though, no pain, no gain and Elhederey does not appear to be someone who is shying away from taking tough strategic decisions without delay.
Monzo achieves US$5.9bn valuation in employee share sale
It was widely reported in the media on Friday that Monzo has achieved a US$5.9bn equity valuation in a secondary share sale that gave its employees access to liquidity (click here for Bloomberg article). This is a higher valuation than the US$5.2bn equity valuation implied by its $610m fundraising in May (click here for Bloomberg article). The company did not disclose how much equity employees sold. Existing investors StepStone Group and GIC participated in the round. Gary Hoffman, Monzo Chairman, reportedly noted: “The valuation we have achieved and the strong investor interest it reflects is a huge endorsement”.
Monzo has clearly made a significant impact in a UK deposit-taking market context (particularly) since its launch in 2015 and recently reported that it now has >10 million personal customers in the UK, which is more than Revolut and Starling Bank. If you’re interested in the company it’s also worth flicking down to my piece on Monzo Europe in the ‘Ireland Perspectives & News Snippets’ section below. With that said, one always should be careful in placing too much faith in valuations ascribed to the equity in a round where employees sell stock and no new investors come in (which is my understanding of the dynamics pertaining to this latest share sale). However, the $610m fundraising in May at a $5.2bn valuation did see new investors (e.g., the VC firm Hedosophia) come on board (as did Revolut’s August employee share sale - click here). The public markets will be a different test for companies like Monzo - instead of appealing to just a few big PE / VC investors it will need to convince a much more fragmented audience of institutional investors of its investment case, which, if the day ever comes, will be a real valuation test (on an interrelated note, it’s worth reading an article from Saturday 12th October on Bloomberg - click here - on how digital players / fintechs have been warning the Labour Government about challenges in achieving UK share listings and on broader concerns around the speed of regulatory decision-making).
Snippets
HMT shareholding in NatWest Group (NWG) falls to <16%: NWG issued a RNS on Wednesday noting that HMT’s shareholding in the bank reduced to <16% following a transaction on 7th October. Click here for details.
Metro Bank (MTRO) Board Update: MTRO issued a RNS on Thursday afternoon noting that, as expected following the 10th June RNS (click here), Cristina Alba Ochoa will step down as Interim CFO on Monday 14th October and will be appointed as a shareholder-nominated NED on 15th October. Click here for details.
TSB fined £10.9m over treatment of customers in financial difficulty: Another week, another bank fine. This week it was TSB’s turn with the FCA announcing on Thursday that it has fined TSB £10.9m for failing to ensure customers who were in arrears were treated fairly between June 2014 and March 2020. Click here for the press release and here for the Final Notice.
S&U plc (SUS) reports significant y/y reduction in 1H24 PBT: SUS, the motor and bridging finance lender, reported interim results for the six months ended 31st July 2024 on 8th October (click here for the results document and here for the slide deck; you can also watch a replay of the investor presentation by clicking here). In short, SUS reported PBT of £12.8m for 1H24 (Advantage Finance PBT £9.4m versus £19.1m in 1H23; Aspen Bridging PBT £3.4m versus £2.4m in 1H23) was down substantially on the PBT of £21.4m reported for 1H23 owing to “difficult trading conditions and an uninspiring performance at Advantage” with Chairman Anthony Coombs pointing his finger in the direction of the FCA, noting: “…an increasingly interventionist stance from the Financial Conduct Authority” that “…has significantly constrained Advantage’s ability to interact with and manage its traditional customers, with whom it has happily worked for the past 25 years”. Still though, Coombs ended on a brighter note in a motor finance context, commenting that “Happily, patient explanation, better documentation and retraining have now produced a more consistent and stable balance between the FCA’s requirements for customer protection and the commercial risk and reward of supplying motor finance. Recent emphasis by the Chancellor on the importance of promoting a competitive financial services market and supporting financial inclusion, along with an upcoming House of Lords select committee inquiry on the topic, provide grounds for optimism. Although resulting in an uncomfortable year, this should provide a sustainable basis for Advantage’s future growth.”.
Ireland Perspectives & News Snippets:
CBI Retail Interest Rates (August 2024) show no m/m movement in mortgage rates again while deposit rates are coming down
The Central Bank of Ireland (CBI) published its monthly Retail Interest Rates update for August 2024 on Friday 11th October (click here). Key points: 1) The weighted average interest rate on new Irish mortgage agreements in August was 4.11% (unchanged m/m again, +1bp y/y) - now 40bps higher than the euro area average, meaning Ireland remains 6th highest in the euro area for mortgage originations pricing. This didn’t get much media attention in the run up to the Budget and, unless Sinn Fein starts making noise on this, I suspect the political system is unlikely to apply any great pressure on the banks in this vein in the relative near-term (see more below on pricing and margins). 2) The volume of new mortgage originations was -14% y/y in August to €851m (renegotiated agreements were -14% m/m to €138m). 3) Fixed rate mortgages represented 68% of the volume of new mortgage agreements in August with standard variable rate comprising the residual 32% (the take-up of variable product has ratcheted up significantly in recent times as consumers expect official rate reductions to translate into lower pricing). 4) The interest rate on new consumer loans increased by 28bps m/m to 7.70% in August. The total volume of new consumer loans was €230m in August, down from €306m in July. However, it must be noted that the pricing on, and volume of, new consumer loans can fluctuate quite wildly on a monthly basis. 5) Following a strong surge in new NFC (non-financial corporate) borrowing in July (with €1.8bn of loan agreements struck, up from just €595m in June), NFC borrowing fell back to €1.2bn in August. The weighted average interest rate on new lending was -71bps m/m to 5.69% in August (still well above the average euro area equivalent rate of just 4.92%), though still above the weighted average interest rate of 5.52% in June. Again, volumes and pricing can ‘ebb and flow’ quite significantly m/m. 6) The average rate on household overnight deposits and NFC overnight deposits (the lion’s share of Irish bank deposit books) remained unchanged m/m at 0.13% and 0.14% respectively in August 2024, which, once again, illustrates the enormous liability margin benefits that the listed banks have enjoyed since official rates started to rise. Interestingly, the weighted average interest rate on new household term deposits and new NFC term deposits was -15bps m/m to 2.62% and -14bps m/m to 3.10% respectively in August. While these rates are considerably lower than the average euro area rates, what these data points don’t speak to is the composition of Irish bank deposit books - which have a substantive bias towards current account and demand product, thereby maintaining blended average deposit costs at an ultra-low level.
Some high-level perspectives on Irish bank margins
The above CBI data reinforces the point that Irish banks have been very slow (at least thus far) to pass on the impact of lower swap rates (and indeed lower actual base rates as well) to Irish mortgage customers. I made this point in the ‘Financials Unshackled’ note of 6th October as follows: “I strongly suspect that the listed lenders will seek to recoup some of the liability margin benefit erosion in a declining official rates climate through higher mortgage spreads (and recent - albeit limited - evidence thus far is that mortgage rates are only being reduced on a highly selective basis in response to official rate changes)”. It’s also worth adding that Irish banks are seeing average spreads on mortgage stock accrete as fixed product originated before official rates started to climb matures. Jon Ihle at The Sunday Times makes similar arguments in a piece today (click here): “…Irish banks don’t need more deposits — they are overfunded already — and so they price accordingly. Second, there isn’t much real competition in the mortgage market right now as non-bank lenders wait for funding in the wholesale market to get cheaper”. All worth bearing in mind as you seek to do some proprietary work on downside rate sensitivities rather than taking the typically highly conservative point-in-time sensitivity assessments published by the banks as gospel.
Monzo injects €4m into Irish unit; picking Ireland as EU hub due to the high regulatory standards? It stands to reason…
The Business Post reported on Wednesday that latest company filings made by Monzo show that the company has injected €4m into its Irish subsidiary (which is set to be a beachhead for an EU-wide expansion effort) and has appointed a number of directors to the subsidiary’s Board (click here for the article). In another piece in the newspaper on Wednesday (click here) Donal MacNamee posits that Monzo’s decision to base its EU hub in Ireland may have been due to the stringent regulatory regime in the country (click here for a good recent briefing note from Matheson (large Irish law firm) on banking regulation in Ireland). The argument here is basically that, to the extent that Monzo is successful in its quest to secure a banking licence in Ireland, it would arguably provide a greater level of validation of its systems, controls and regulatory compliance to investors and stakeholders than a licence issued by another EU member state might (if you can meet the bar in Ireland…). This categorically stands to reason in my view. While there has been much criticism levelled at the Irish regulator in a banking licence procurement context, it is right to insist on the highest standards. The CBI’s rigorous approach will likely pay dividends in the long-term in my opinion. Indeed there have been many cases of new entrants / fintechs running into difficulty in a regulatory compliance context in other markets, including players that have commenced the process of seeking to secure an Irish banking licence in the past.
Snippets
ICS launches bridging finance proposition: Joe Brennan at The Irish Times reported on Thursday on ICS Mortgages’ launch of a bridging loan product in Ireland - click here for the article and I was delighted to contribute to the piece as well as the more analytic piece that followed in The Irish Times on Saturday (click here). In short, this is a much-needed product to facilitate home movers (particularly those trading down given the under-occupation of Irish homes). While the lazy critic will level frustration at the mainstream Irish banks for not offering such product, the reality is more nuanced. While bridging finance can offer superior risk-adjusted returns than those available on mainstream lending products (especially considering the rates that ICS is charging) repayment challenges and loan extensions can balloon quickly upon a change in housing market conditions - something the Irish banks (and their investors) are understandably very keen to avoid given historical experiences as well as penalties in a risk weighting / capital requirements context for high NPEs / loan losses. Moreover, judging by the high returns on capital that the banks are printing, they don’t need to move up the risk curve like that. Indeed, in a UK market context, most bridging finance is provided by specialist (often non-bank) lenders so it’s not like Ireland is an outlier in this respect. Of course there is an entirely separate banking government policy question as regards what can be done to stimulate the provision of such loan product.
Interesting interview with Fexco Financial Services CEO: The Business Post published an interesting interview with Sean Crowe, CEO of Fexco Financial Services on Friday, which is well worth a read (click here). Crowe was the former CEO of Markets & Treasury at Bank of Ireland (BIRG) and he diplomatically manoeuvres the fintechs versus banks question, opting to differentiate between the two in an “agility” and an “innovation” context. He deftly highlights challenges in relation to disruption in the banking market - talking about global rather than local market dynamics - while positioning Fexco as a solution in this vein, as follows: “If we take it away from Ireland for a moment, in most of the international markets that we operate in, we're seeing the incumbent banks being challenged by tech companies. We think we're part of the solution for them because we can bring the bits to the incumbent banks, like the DCC or something like that, that makes them look more fintech, it helps them to jump a generation without having to change all the plumbing behind it.”.
Podcast on banks: I had a great chat with Conall O Móráin on the That Great Business Show podcast on Monday last (which was broadcast on Thursday). Click below if you would like to tune in to an easy listen on European banking M&A and what it could mean for Irish banks in due course.
Global Perspectives & News Snippets:
Select Global Sectoral Developments Update
Just a few Snippets this week
BBVA Chair writes in the FT about the need for greater scale to counteract longer-term disruption challenges - click here. While it’s an argument that is somewhat self-serving in the context of BBVA’s current quest to acquire Sabadell, it’s also valid in my view.
Click here for a good FT podcast on whether Unicredit’s stakebuilding in Commerzbank could reignite European banking M&A. Click here for a transcript.
BIS progress report on the 2023 banking turmoil and liquidity risk (click here) sets out its thoughts on how liquidity supervision may need to evolve.
Click here for Bloomberg report on how the spread on AT1 bonds over Tier 2 bonds is approaching record lows, prompting some investors to switch out of AT1 into T2.
Click here to read ECB Executive Board member Frank Elderson’s interview with Delo in which he notes again that the ECB is supportive - in principle - of banking consolidation: “We have been crystal clear that cross-border consolidation can be an instrument for further integration of the European banking sector, and we stand by that. Consolidation can also help address long-standing issues in the European banking sector, such as low profitability. Nonetheless, mergers always carry risks and, as supervisors, we assess them carefully, always applying the limitative criteria set out in Article 23 of the Capital Requirements Directive. Our job is to ensure that every banking transaction – whether at cross-border or national level – results in a banking group that can comply with supervisory requirements in the foreseeable future.”.
Click here to read ECB Supervisory Board member Elizabeth McCaul’s speech at the S&P European Financial Institutions Conference on various risks affecting the banking sector (with a particular timely focus on liquidity, including the clear drawbacks with a singular focus on LCR and NSFR ratios) as well as challenges presented to the wider financial ecosystem as Big Tech and non-banking firms encroach (and with a particular focus on risks posed by NBFIs).
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