FIRST-QUARTER 2022 BANK EARNINGS IN REVIEW

KBRA Financial Institutions Group analysts John Rempe, Director, and Leah Hallfors, Senior Director, cover the key takeaways of 1Q22 financial results, dissect interest rate sensitivity of KBRA’s coverage and also review the potential impact of inflationary pressures on auto lending. The eighth episode of Bank Compendium Insights highlights:

1. Earnings Performance: Bank ROA and NIM results and trends in a higher interest rate environment

2. Capital: Core capital trends and impact of AOCI on TCE ratios

3. Consumer: Drill down on auto lending

4. ESG Bulletin Spotlight – PacWest Bancorp and Industry developments in ESG

KBRA releases a new podcast episode discussing the Ukrainian refugee crisis and the financial support being organized as a means of assistance. The discussion explores topics such as potential costs, allocation of funds between countries hosting refugees and displaced persons within Ukraine, facilities already announced, as well as the macro and political backdrop in Europe in face of this new stress.

“The theme of refugee absorption will likely take center stage for European politics in the coming weeks and months as the pressure mounts,” according to Ken Egan, Director in KBRA’s Sovereigns Group.

The latest podcast episode brings together KBRA’s Joan Feldbaum-Vidra, Managing Director and Head of Sovereigns, and Ethan Heisler, Editor of The Bank Treasury Newsletter, who published an NIRP report in September 2020. Citing key takeaways from the report, they note that NIRP has not fully delivered on its promises and, as a policy tool, showed shortcomings given that negative rates cannot fall below the storage cost of money.

Fourth-Quarter 2021 Bank Earnings In Review: A Year and a Pandemic in Review

KBRA Financial Institutions Group analysts Brian Ropp, Senior Director, and John Rempe, Director, cover the key takeaways of 4Q21 financial results and dissect the impact that nonrecurring revenue sources had on bank earnings and our 2022 outlook. The seventh episode of Bank Compendium Insights highlights:

1. Revenue: Mortgage banking and PPP income’s impact on bank earnings

2. ROA: 2020 and 2021 loan provision build/releases impact on ROA

3. 2022 outlook for bank industry

In this episode, Gordon Kerr, Head of European Research is joined by Killian Walsh, Kali Sirigudi, Stephen Hughes and Gabriele Gramazio to discuss the Outlook for European structured finance in 2022. Challenges are developing on the horizon for the market. Listen in as Gordon engages with his colleagues to outline how KBRA view the impact on the European securitisation market.

In this episode, KBRA Managing Director and Head of Sovereigns Joan Feldbaum-Vidra reviews the main takeaways from her recent report, Sovereigns 2022 Outlook: New Challenges Ahead, and expands on the role of inflation expectations as adding complexity to the new challenges ahead.

“In some countries, despite a long period of relatively tamed inflation, the anchoring of expectations is at a higher level,” Feldbaum-Vidra said. “In this next period, which involves new challenges, this can create complexities and amplify risks.”

Third-Quarter 2021 Bank Earnings In Review: Three Points in Bank Credit

KBRA Financial Institutions Group analysts Brian Ropp, Senior Director, and John Rempe, Director, break down three key points in bank credit and why you should expect higher quality bank earnings quality going forward---as noncore items are running their course. The sixth episode of Bank Compendium Insights, highlights:

1. Liquidity and net interest margin, and our expectations going forward.

2. Strong credit quality and slower loan growth have driven Loan Loss Reserve Releases, however we believe provision recaptures are moderating.

3. With noncore earnings running their course, we expect higher quality of earnings going forward.

In this episode, Gordon Kerr, Head of European Research, and Karim Nassif, Director, Project Finance & Infrastructure Ratings, discuss the increasing role of market risk in renewable project finance. Increasing market risk amid a rapidly growing environment creates challenges for project finance transactions. Karim and Gordon discuss these challenges and the way transactions have adapted to the changing environment.

In this episode, Michael Alter, Associate Director of Power, Energy, and Renewable Finance, and Andrew Giudici, Global Head of Corporate, Project, and Infrastructure Finance, discuss what energy storage is, the types of use cases it can target, and how KBRA assesses the technology in terms of project credit quality and environmental, social, and governance (ESG) risks.

In this episode, Joan Feldbaum-Vidra, Head of Sovereigns at KBRA, highlights the following topics:

• China growth slowdown and monetary policy normalization by global central banks are key to watch.

• Food price inflation is a particularly sensitive area for emerging markets (EM).

• Real effective exchange rate weakness helps insulate EMs from shock.

• Reality check: Many EMs have until recently upgraded their growth projections and have been proactive in the face of tightening credit conditions.

“Inflationary impulses don’t appear to be putting EMs in the danger zones like in the past, even considering the inflation we are experiencing in this stage of the pandemic environment.” – Joan Feldbaum-Vidra