Money Management – The Digital Sanctuary http://thedigitalsanctuary.org/ Fri, 28 May 2021 13:33:09 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 https://thedigitalsanctuary.org/wp-content/uploads/2021/05/the-digital-sanctuary-icon-150x150.png Money Management – The Digital Sanctuary http://thedigitalsanctuary.org/ 32 32 Lendingkart raises $ 15 million from Dutch bank FMO https://thedigitalsanctuary.org/lendingkart-raises-15-million-from-dutch-bank-fmo/ https://thedigitalsanctuary.org/lendingkart-raises-15-million-from-dutch-bank-fmo/#respond Wed, 07 Apr 2021 23:16:31 +0000 https://thedigitalsanctuary.org/lendingkart-raises-15-million-from-dutch-bank-fmo/

Agreement marks an extension of Lendingkart’s three-year working relationship with the bank receiving funds through MNTs

Lendingkart mainly meets the capital needs of small and medium-sized businesses

Founded in 2014 by Harshvardhan Lunia and Mukul Sachan, the company claims to have disbursed more than one Lakh loan to over 91,000 MSMEs to date

Ahmedabad-headquartered non-bank finance company (NBFC) and lending technology platform Lendingkart have raised $ 15 million from FMO, the Dutch entrepreneurship development bank.

The deal marks an extension of Lendingkart’s three-year working relationship with the bank receiving funds via NCDs (non-convertible debentures) and increases its cumulative exposure to $ 19 million with this transaction.

Lendingkart mainly meets the capital needs of small and medium-sized enterprises (SMEs). Founded in 2014 by Harshvardhan Lunia and Mukul Sachan, the company claims to have disbursed more than one Lakh loan to over 91,000 MSMEs in more than 1,300 Indian cities.

According to Lunia, Lendingkart’s investment over the years in building technological structures has helped the company overcome the pandemic, when physical distancing protocols hampered operations on the ground. These included its digital assisted real-time application process, in which a designated person from the team walks the potential client through their loan application process. Aadhaar and video customer identification features have also helped, as has the advent of services like e-Aadhar, digital signature, e-NACH for mandatory KYC requirements.

In a conversation with Inc42 in January, the founder claimed that Lendingkart witnessed a 5-fold increase in SME working capital requirements during last year’s Diwali holiday season, October to November, compared to at the same time in 2019. And after 4 to 5 months of stalling, its growth numbers normalized to pre-Covid levels.

“During the lockdown period in April and May 2020, we saw almost 1.5 Lakh requests from customers. Almost 60% of all apps came from our website or mobile app. Another 40% was through online channel partners like Paisa Bazaar. Global volumes have fallen by nearly 50% due to the uncertainty of the business environment, ”he said at the time.

During the financial year ending March 31, 2020 (FY20), Lendingkart reported disbursing a loan worth INR 2400 Cr to MSMEs, registering an 80% growth in AUM (assets under management) , 110% of gross income and 118% of profits before taxes. A Inc42 october story performed a detailed overview of Lendingkart’s second consecutive profitable year, with a turnover of 464 Cr INR.

Speaking of the recent funding, Lunia said, “FMO’s investment in Lendingkart is a testament to the company’s strong growth fundamentals and its continued track record and business performance despite the unprecedented impact of the pandemic. The funding also demonstrates the continued international support for the vibrant MSME sector in India and its critical role in contributing to India’s vision of becoming a $ 5 trillion economic vision. “

This new influx of funds into Lendingkart will be used to digitally extend the reach of financial products to the MSME segment.

To date, the company has raised $ 242.5 million in 11 rounds of funding from 14 investors. Its most recent round of funding was in May last year, worth $ 43 million, led by Bertelsmann India Investments, Fullerton Financial Holdings, India Quotient and Sistema Asia Capital.

In January, in order to facilitate better coordination with its agent partners across the country, Lendingkart launched an omnichannel SaaS platform for its agent partners, called Lendingkart xlr8.

The target audience for the SaaS product will be Partner Agents or Direct Selling Agents (DSAs) that Lendingkart has worked with for field sales. Its DSAs include Paisabazaar and Ruloans. Previously, due to the dispersed presence of DSAs, Lendingkart had to hire a manager for these agents. But now, since the demand for credit has increased sharply, there is a need to automate this process. Lunia explained that the need for a SaaS platform for its agents on the ground arose when the country went into lockdown at the end of March last year, in order to contain the spread of the pandemic of Covid-19.

Lendingkart’s new product will provide agents with an API suite. This will allow them to have the Loan Path Status available on their own platforms, so they can create, process and track all of their inquiries without depending on Lendingkart staff.

The company had claimed that xlr8 would allow faster processing of loan applications, with minimal documentation and without the need for offline media to communicate.

Consumer loans gain ground in India

India is home to around 1,263 digital lending startups, of which more than 147 (12% of the total 1,263) are backed by venture capital funds. With an influx of venture capital into B2B lending startups growing at a CAGR (2015-2019) of 72%, it remains the most favored sub-segment of the lending technology segment.

The share of financing for consumer credit startups was 16% or $ 393 million out of $ 2.4 billion between 2014 and the third quarter (Q3) of 2020.

Lendingkart’s consumer lending ambitions will face the challenge of other digital fintech startups such as ZestMoney, as well as global companies such as WhatsApp, Amazon and Flipkart, all of which seek to aggressively tap the demand for credit in the largely unserved segment of the population. which lives beyond Indian metropolises.

An analysis of the opportunities present in the consumer loan segment in India can be found in a recent Inc42 Plus report, Lending Technology in India: The Rise of Consumer Lending, Report 2020.


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Bank loans fall 2.7% in February: BSP https://thedigitalsanctuary.org/bank-loans-fall-2-7-in-february-bsp/ https://thedigitalsanctuary.org/bank-loans-fall-2-7-in-february-bsp/#respond Wed, 07 Apr 2021 23:16:31 +0000 https://thedigitalsanctuary.org/bank-loans-fall-2-7-in-february-bsp/

MANILA – Bank lending fell 2.7% in February in part due to the pandemic-induced slowdown in activity, the Bangko Sentral ng Pilipinas said on Wednesday.

Universal and commercial banks’ outstanding loans, net of reverse repo placement with BSP, contracted 2.7% year-on-year in February after falling 2.5% in January, BSP said. in a press release.

Outstanding loans to residents, net of RRPs, decreased by 2.1% while outstanding loans to non-residents contracted by 20.7%. Credit activity slowed further as demand for loans remained weak.

On a seasonally adjusted monthly basis, outstanding universal and commercial bank loans, net of RRPs, increased 0.2%, he said.

The BSP said consumer loans fell 8.3% in February due to “the continued decline in credit card and motor vehicle loans” and the slowdown in salary-based consumer loans.

Loans to major industries also declined, particularly to wholesale and retail trade and repair of motor vehicles and motorcycles, finance and insurance activities, and manufacturing.

Loans in some key production sectors such as real estate, power, gas, steam and air conditioning, transportation and storage “partially moderated” the contraction, the central bank said.

Loans outstanding for production activities fell 1.3% in February, BSP said.

“The BSP seeks to maintain its monetary policy in support of the measures taken by the government to deal with the pandemic. The BSP is ready to take immediate action, if necessary, to ensure sufficient liquidity and credit in the financial system, in line with its price and financial stability targets, “It said.

Bank loans in the Philippines fell for the first time in more than 14 years in December due to declining consumer demand and business activity during the COVID-19 pandemic.

The BSP said earlier that it expects bank lending to pick up with the implementation of a bill intended to allow banks to discharge bad debts. For more offers view greendayonline.com

ANC, ANC Top, bank loans, loans, BSP, motorcycle loan, credit card, economy, COVID-19, COVID-19 pandemic

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Rural consumption: how fintech ‘bagging’ can bring financial services to the bottom of the rural stratum https://thedigitalsanctuary.org/rural-consumption-how-fintech-bagging-can-bring-financial-services-to-the-bottom-of-the-rural-stratum/ https://thedigitalsanctuary.org/rural-consumption-how-fintech-bagging-can-bring-financial-services-to-the-bottom-of-the-rural-stratum/#respond Wed, 07 Apr 2021 23:16:31 +0000 https://thedigitalsanctuary.org/rural-consumption-how-fintech-bagging-can-bring-financial-services-to-the-bottom-of-the-rural-stratum/

Financial products intended for last mile access must be small and short-lived, aimed at meeting the specific needs of the population.

Mahatma Gandhi’s concept of Gramodaya, Antodaya and Sarvodaya captures the true essence of all economic progress and development. These terms can be roughly translated as the rise of rural India, the last mile and the rise of all. Today, this is especially true than ever because for India to shine brightly, rural India must move forward. It is becoming increasingly clear that “inclusive growth” is essential to facilitate our country’s journey towards economic progress. India, home to one of the most fragmented banking systems, has deployed new age financial startups to expand its reach, pushing the financial inclusion agenda in the process. However, in a largely geo-distributed population like ours, financial inclusion has been a huge challenge due to factors such as: socio-economic influences, inhibition of technology adoption, distribution costs and exploitation and lack of inclusive growth, among others.

Most of India’s population lives in villages, it is imperative that a strong network is in place – both digital and supported – to enable beneficiaries to benefit from it. People living in rural areas have a particular need for financial services for a range of products – such as easy access to savings, credit, education, working capital for entrepreneurship and for social reasons. protection like health insurance. Several constraints such as the high cost of financial infrastructure in these areas, lack of financial literacy and high transaction costs also discourage people from depositing savings, thus depriving households of the opportunity to build up assets. financial. The key is to allow banks to be independent of their location, ensuring that no matter where people are, they have access to financial facilities.

Fintechs are driving the inclusion wagon with their technological solutions. They are quickly becoming the face of opportunities for financial inclusion, especially in an economically diverse and developing country like ours. The growth story of the fintech industry in India – due to its capabilities and agility – points to a huge financial services market opportunity that has not been exploited. Technological innovations aimed at breaking down the barriers of the urban-rural divide have the potential to bring more shy people into the realm of financial inclusion. With a growing number of startups, a mature ecosystem and a favorable government position, it goes without saying that fintech is here to stay and grow further. The idea is to push the fintech industry down a path where it should make a difference – beyond an easily accessible market for tech-savvy urban customers.

The barrier of accessibility in underserved areas is largely addressed by branchless banking – through correspondent business (PO), point-of-sale terminals and mobile banking. Their use has only intensified since the pandemic – with more and more people adopting channels like the Aadhaar Activated Payment System (AePS) or micro ATMs to withdraw cash and access DBT funds ( direct profit transfer) in the peak months of foreclosure when movement was severely restricted.

Also read: Zomato, Byju’s, Dream11, and others lead 85% PE-VC funding jump in Q1 2021 even as deal volume declines

To generate appeal within the rural stratum, governments and providers must closely monitor adoption patterns and understand the needs of clients to bring them into the realm of financial inclusion. One of the main obstacles to their access to formal banking channels is their irregular income flow which prevents them from obtaining bank loans, saving for interest and even purchasing insurance policies, which usually involve high premiums. Bagging services is one way to get to the bottom of the pyramid – tailoring financial offerings to be affordable to meet future goals. This will allow communities outside the financial fold to save, borrow and invest safely. This will spare them for future contingencies and unscrupulous lending channels, which often push them further into the debt trap.

Financial products intended for last mile access should be small and short-lived, aimed at meeting the specific needs of the population. Bagging isn’t a new concept – it has already transformed the consumer goods industry (think shampoo bags) – helping services move from luxury to affordability. Through these “micro” sizes, a systemic change can be made in their mindset when it comes to insurance, investing and even lending. With the help of APIs and plug-and-play platforms, they can serve a huge segment of the population with low value, high volume personalized transactions. Take the case of telecommunications; smaller refill packs are in demand compared to higher value refills.

Accessibility, user-friendliness, user-friendliness, interoperability, rapid decision-making and rapid processing are key factors in delivering financial services in a bag. It would also require a change of approach in the mindset of suppliers, moving from a push-based offer to a pull-based one. The process will help meet specific and contextual needs by modifying the commodity offerings.

This cohort, although often underbanked and unbanked, but very ambitious, is exposed to trends through internet connectivity and smartphones. At a time when large corporations have been notoriously hit by a series of defaults, which are typically recipients of large bank loans, rural areas are emerging as the rescuers of the economic flow by stimulating consumption and it’s on the way. banking ecosystem to ensure that it has a multiplier effect. Ultimately, it is only through Gramodaya and Antyodaya that we can bring about an era of Sarvodaya. And bagging is the way to go!

Anand Kumar Bajaj is the Managing Director and CEO of PayNearby. The opinions expressed are those of the author.

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Ambac and others beat CFPB lawsuit against student loan trusts https://thedigitalsanctuary.org/ambac-and-others-beat-cfpb-lawsuit-against-student-loan-trusts/ https://thedigitalsanctuary.org/ambac-and-others-beat-cfpb-lawsuit-against-student-loan-trusts/#respond Wed, 07 Apr 2021 23:16:31 +0000 https://thedigitalsanctuary.org/ambac-and-others-beat-cfpb-lawsuit-against-student-loan-trusts/

Law360 (March 26, 2021, 11:21 p.m. EDT) – A Delaware federal judge on Friday dismissed the Consumer Financial Protection Bureau’s action regarding the collection practices of a group of student loan trusts, endorsing the argument of the ‘speaker Ambac Assurance Corp. that the agency did not have the power to bring the action back when its structure was unconstitutional.

The CFPB claimed in its enforcement action that the trusts had filed thousands of collection lawsuits, falsely claiming to have personal knowledge of consumer accounts and debts. On top of that, at least 2,000 collection lawsuits were filed without the necessary documentation to prove that the trust owned the debt, the agency alleged.

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Staff completes virtual mission for the second review of the Gambia Extended Credit Facility https://thedigitalsanctuary.org/staff-completes-virtual-mission-for-the-second-review-of-the-gambia-extended-credit-facility/ https://thedigitalsanctuary.org/staff-completes-virtual-mission-for-the-second-review-of-the-gambia-extended-credit-facility/#respond Wed, 07 Apr 2021 23:16:31 +0000 https://thedigitalsanctuary.org/staff-completes-virtual-mission-for-the-second-review-of-the-gambia-extended-credit-facility/

Staff completes virtual mission for the second review of the Gambia Extended Credit Facility

April 1, 2021

End-of-mission press releases include statements from staff teams that communicate preliminary findings after a country visit. The views expressed in this statement are those of the staff of the IMF and do not necessarily represent the views of the Executive Board of the IMF. Based on the preliminary findings of this mission, staff will prepare a report which, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

  • The COVID-19 pandemic has significantly affected the Gambian economy. GDP growth is estimated at zero percent in 2020. Authorities have taken swift and effective measures to deal with the spread of the pandemic, support the population and the economy.
  • Performance under the ECF-supported program has been strong. All the quantitative objectives at the end of December 2020 have been achieved. Good progress has been made under a broad program of structural reforms.
  • Unlocking the ongoing constitutional reform would be important for advancing some key macroeconomic policies, including on public enterprises and public financial management.

Washington, DC – April 1, 2021:
A team from the International Monetary Fund (IMF), led by Mr. Ivohasina Fizara Razafimahefa, Head of Mission for The Gambia, carried out a virtual mission with the Gambian authorities from March 22 to April 1, 2021 to discuss the second review of the economic situation from The Gambia. program supported by the IMF’s Extended Credit Facility (ECF).

[1]

At the end of the mission, Mr. Razafimahefa made the following statement:

“The mission team reached a staff level agreement with the Gambian authorities on the economic and financial policies likely to support the approval of the second review of the ECF-supported program. Performance under the program has been strong despite the challenges caused by the COVID-19 pandemic. All the quantitative objectives at the end of December 2020 have been achieved. The structural benchmarks have also been completed. The staff-level agreement is subject to approval by IMF management and the IMF Executive Board. The review by the Board is tentatively scheduled for May 2021; Upon approval of this second program review, SDR 10 million (approximately US $ 14 million) will be made available to The Gambia.

“The Gambian economy has been significantly affected by the COVID-19 pandemic. Economic growth is estimated to have slowed from 6.1% in 2019 to zero% in 2020, mainly due to a sharp decline in the tourism sector, partly mitigated by good agricultural production and strong private construction financed by d ‘large flows of remittances. Inflation fell from 7.7% (year-on-year) at the end of 2019 to 5.7% at the end of 2020, partly reflecting weak domestic demand. The budget deficit was contained at 2% of GDP despite the rapid and effective responses of the authorities to deal with the spread of the COVID-19 pandemic and support the population and the economy. This commendable budgetary result has helped to further lower the ratio of public debt to GDP. Liquidity increased significantly, fueled by private remittances, but credit to the private sector only increased by 0.8% as banks took a cautious approach to lending given the very uncertain economic environment. Foreign exchange reserves further strengthened, exceeding 5 months of potential imports in February 2021.

“The Gambian authorities are meeting their commitments to transparency of spending related to COVID-19. They have posted details of all public procurement related to COVID-19 on the Gambia Public Procurement Authority (GPPA) website. An audit of these expenditures is underway and the report is expected to be published in September 2021. Good progress has also been made in revenue administration and public finance management, particularly with regard to the cleaning of the taxpayer register. , a digital transformation of revenue administration, an audit of ministries / departments / agencies, civil service reforms, selection of public investment projects, cash management and deployment of the integrated information system financial management. It would be important to unblock the process of constitutional reform, still under debate, to allow progress to be made on certain key macroeconomic policies, in particular on public enterprises and the management of public finances.

“In the future, some recovery in economic activity is expected in 2021, based on continued good performance in private construction and agriculture, the acceleration of projects related to the Organization of Islamic Cooperation, as well as a gradual resumption of other activities following the COVID -19 vaccination campaign. In the medium term, economic growth is expected to return to its long-term average of around 6% as tourism returns to pre-pandemic levels and the global economy recovers. The authorities are making the necessary efforts to address fiscal pressures on revenues and expenditures in 2021. They are committed to continuing their prudent borrowing policy to continue reducing debt vulnerabilities over the medium term.

“The mission had talks with the Minister of Finance and Economic Affairs Mambury Njie, the Governor of the Central Bank of The Gambia Buah Saidy, senior officials of the Ministry of Finance and Economic Affairs, the Central Bank of The Gambia, the Ministry of agriculture, Ministry of Public Works and Transport, Ministry of Tourism, Ministry of Justice and some public enterprises. The mission also met with representatives of the private sector and development partners. The mission would like to thank the Gambian authorities for the constructive discussions and their spirit of cooperation. ”



[1]

The Extended Credit Facility (ECF) provides financial assistance to countries facing protracted balance of payments problems. It supports countries’ economic programs aimed at moving towards a stable and sustainable macroeconomic position compatible with strong and sustainable poverty reduction and growth. ECF can also help catalyze additional foreign aid.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Andrew Kanyegirire

Call: +1 202 623-7100E-mail: MEDIA@IMF.org

@IMFSpokesperson




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Marijuana retail, consumption outlets invited to set up in downtown Muskegon Heights https://thedigitalsanctuary.org/marijuana-retail-consumption-outlets-invited-to-set-up-in-downtown-muskegon-heights/ https://thedigitalsanctuary.org/marijuana-retail-consumption-outlets-invited-to-set-up-in-downtown-muskegon-heights/#respond Wed, 07 Apr 2021 23:16:31 +0000 https://thedigitalsanctuary.org/marijuana-retail-consumption-outlets-invited-to-set-up-in-downtown-muskegon-heights/

MUSKEGON HEIGHTS, MI – Muskegon Heights is ready to welcome recreational marijuana businesses, including downtown retail and consumer establishments.

City Council has approved an “adult-use” marijuana ordinance that allows cultivation, processing, safety compliance, transportation, retail and consumption as well as microenterprises where marijuana can be grown and sold.

“All around us, recreational marijuana is popping up,” Muskegon Heights Mayor Walter Watt told MLive. “We cannot continue to sit and watch our citizens move on and become consumers in other areas.”

The town of Muskegon rrecently expanded its recreational marijuana prescription, allowing a micro-marijuana business near its downtown as well as retail outlets on Apple Avenue in addition to its established neighborhood in the Seaway Drive / Laketon Avenue area.

RELATED: Several new OK’d marijuana commercial sites in Muskegon

The Muskegon Heights ordinance allows retail outlets in the central business district as long as they allow cannabis consumption on the premises. However, these businesses must first receive a special land use permit from the city planning commission.

Retail and consumer establishments, which are also permitted in certain other areas of the city, are limited to three.

An application acceptance and approval process for adult-use marijuana businesses is being developed, with the goal of having it ready by the end of October, said the city manager of Muskegon Heights, Troy Bell.

The ordinance authorizes a maximum of five cultivation operations, five processing operations, five microenterprises, three outlets and three consumption centers.

Any business that allows both alcohol and marijuana use must cover the cost of having an additional police officer on site between 9 p.m. and 3 a.m., Bell said.

Microenterprises can grow up to 150 plants, process them and sell them.

The city allows retail, consumer and micro-business establishments in its central business district and in certain shopping areas along Seaway Drive, and on Getty Street near East Broadway Avenue, East Sherman Boulevard and East Norton Avenue as long as they receive special land use permits. They are also allowed in many industrial areas without additional permits.

Transport, growth and processing companies are allowed in industrial zones. Safety compliance facilities are permitted in industrial areas and some commercial areas with special land use permits.

Retail and recreational marijuana use outlets will be permitted in Muskegon Heights in commercial areas, marked in red, dark red and dark yellow, with a special use permit. They are also allowed in industrial areas highlighted in light gray and dark gray.

Also on MLive:

Paid parking set up in Muskegon Heights on weekend evenings

Muskegon Heights pays to send residents to police academy in exchange for volunteering

Muskegon adds Apple Avenue site to marijuana business district


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Comerica (CMA) benefits from cost control: should we wait? https://thedigitalsanctuary.org/comerica-cma-benefits-from-cost-control-should-we-wait/ https://thedigitalsanctuary.org/comerica-cma-benefits-from-cost-control-should-we-wait/#respond Wed, 07 Apr 2021 23:16:30 +0000 https://thedigitalsanctuary.org/comerica-cma-benefits-from-cost-control-should-we-wait/

On April 6, we published an updated research report on Comerica Incorporated CMA. The company continues to benefit from initiatives to increase revenues and controlled spending, while the lack of diversification of the loan portfolio and significant exposure to some tough economies remain headwinds in the near term.

Zacks’ consensus estimate for the company’s earnings for the current year has been revised up 1.9% in the past 30 days. The action is currently ranked Zacks # 3 (Hold).

Comerica shares have jumped 69.7% in the past six months, topping the industryrally of 53.9%.

Having experienced continuous organic growth over the past several years, the company also remains focused on achieving robust revenue growth rates in the days to come. Given the company’s competence in implementing strategic initiatives, it has the potential to generate solid revenue. In addition, in a gradually recovering economy, the company’s loan balances are expected to improve, leading to growth in net interest income.

Despite continued investments in technology and other expenses, Comerica’s non-interest expense recorded a negative 1.9% CAGR over five years (end of 2020) due to GEAR Up initiatives. These controlled expenses will likely contribute to the expansion of the bottom line. In addition, management anticipates lower expenses in the first quarter of 2021, due to a likely decrease in deferred compensation and pension costs, seasonal reduction in occupancy, staff insurance and advertising. .

However, Comerica still derives a significant portion of its total revenues from California and Michigan, where the economic environment has remained increasingly difficult in recent years. Although the environment has seen some visible improvements, any major turnaround remains ambiguous, thus preventing considerable income generation in these regions.

In addition, a large portion of Comerica’s loan portfolio – nearly 81% as of December 31, 2020 – includes commercial and commercial mortgages. Such a lack of diversification can be precarious for the company in a difficult economic context.

Stocks to consider

Top-ranked stocks in the financial space include Summit Financial Group, Inc. SMMF and United Bankshares, Inc. UBSI, who currently carries a Zacks # 2 (Buy) rank, while Fifth third Bancorp FITB currently has a Zacks rank of # 1 (strong buy). You can see The full list of current Zacks # 1 Rank stocks here.

Summit Financial has seen a 3.4% upward revision to earnings estimates for the current year over the past 30 days. In addition, its shares have gained 59.3% in the past six months.

United Bankshares’ profit estimate for the current year has been revised up 3.4% in the past 30 days. In addition, its shares have jumped 58.8% in six months.

Fifth Third Bancorp’s profit estimate for the current year has shifted 5.6% north in 30 days. In addition, its share price rose 64.4% in six months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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Vietnam: successfully navigating the pandemic https://thedigitalsanctuary.org/vietnam-successfully-navigating-the-pandemic/ https://thedigitalsanctuary.org/vietnam-successfully-navigating-the-pandemic/#respond Wed, 07 Apr 2021 23:16:30 +0000 https://thedigitalsanctuary.org/vietnam-successfully-navigating-the-pandemic/

Hanoi City Center, Vietnam: The country has successfully contained both COVID-19 and its adverse economic effects. (photo: Minh Luu & AA + Photography by Unsplash)

Vietnam: successfully navigating the pandemic

March 10, 2021

Despite COVID-19, Vietnam’s economy has remained resilient, growing 2.9% in 2020 – one of the highest growth rates in the world – and growth is expected to be 6.5% in 2021, thanks to strong economic fundamentals, decisive containment measures and well – targeted government support, according to the latest annual assessment of the country’s economy.

Going forward, it is imperative that policymakers limit the permanent economic legacy and support a robust recovery, while laying the groundwork for reforms aimed at boosting productivity and reducing economic dualism.

The following graphics illustrate Vietnam’s experiences during the pandemic and the political priorities ahead.

  • The pandemic has hit the economy hard, but Vietnam has taken decisive action to limit the health and economic fallout. The rapid introduction of containment measures, combined with aggressive contact tracing, targeted testing and isolation of suspected COVID-19 cases, has helped to keep recorded infection and death rates at particularly low levels per inhabitant. Successful containment, coupled with timely political support, also helped to limit the economic fallout and the size of the emergency response package. In 2020, the Vietnamese economy grew by 2.9%, one of the highest growth rates in the world, supported by the early rebound in domestic activities and strong export performance, especially exports of high-tech electronic products because people all over the world were working from home.
  • Vietnam entered the pandemic with solid economic fundamentals and policy cushions, although some structural challenges remain. Since the advent of the market-oriented “Doi Moi” reforms in 1986, Vietnam has grown from one of the poorest countries in the world to a lower middle income country. The structural transformation of agriculture to a modern economy based on foreign direct investment in manufacturing and the emphasis on “leaving no one behind” has improved living standards. Strong foreign investment and current account surpluses have strengthened external resilience. The health of the banking system has improved, with higher profitability, liquidity and fewer NPLs than in the past, although weaknesses remained. And the country made considerable progress in consolidating public finances before COVID-19. Putting in place these fiscal, external and financial buffers before the pandemic made Vietnam more resilient to the shock.. However, despite these favorable results and the structural reforms underway, much remains to be done to boost productivity and improve economic resilience.
  • Macroeconomic policies will need to remain favorable in 2021 to ensure a resilient and inclusive recovery. The Vietnamese labor market was hit hard in the second quarter of 2020, especially the large informal sector with limited access to social insurance. While a subsequent rebound in informal employment has occurred, the weakness persists. Short-term policies should focus on maintaining employment while promoting a reallocation of resources. This can be achieved, for example, by using hiring subsidies and active labor market policies to encourage vocational training. The coverage of the existing social safety net must be continuously extended and its effectiveness improved. Over time, policies should aim to reduce the informality of work by improving the skills of the workforce and lowering the costs of recruiting / firing formal workers, and by encouraging the formalization of enterprises.
  • A sustained recovery also requires safeguarding financial stability. Vietnamese companies entered the crisis with relatively weak balance sheets, especially small and medium enterprises which dominate the hardest hit sectors. COVID-19 further deteriorated their liquidity and solvency positions, raising financial stability concerns through bank exposures. The monetary, fiscal and financial policies implemented by the government have helped to mitigate the immediate risk of a spike in business failures and massive layoffs. This support should be better targeted at illiquid but viable businesses until the recovery is on firmer ground. Ongoing and rigorous supervision, along with timely efforts to resolve lending issues and strengthen regulatory and supervisory frameworks, will help address financial system risks.
  • More decisive reforms are needed to make the most of Vietnam’s considerable growth potential. This would require tackling the sources of widespread low productivity. Priority should be given to improving the business environment and ensuring a level playing field for small and medium-sized enterprises, with reforms aimed at reducing the regulatory burden faced by enterprises, improving their access resources, improve governance and access to technology and innovation, and reduce skills mismatches. Reforms in these areas would also help Vietnam gain more from its participation in global value chains in the post-pandemic world.

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Price correction in the cards for Bank Of America shares? https://thedigitalsanctuary.org/price-correction-in-the-cards-for-bank-of-america-shares/ https://thedigitalsanctuary.org/price-correction-in-the-cards-for-bank-of-america-shares/#respond Wed, 07 Apr 2021 23:16:30 +0000 https://thedigitalsanctuary.org/price-correction-in-the-cards-for-bank-of-america-shares/

[Updated 03/26/2021] Bank of America

BAC
Update

Having gained 108% from the March 23 low of last year, at the current price close to $ 38 per share, we believe Bank of America Shares (NYSE: BAC) has some room for maneuver on the downside. Bank of America, a leading financial institution in the United States, saw its stock drop from $ 18 to $ 38 from the March 2020 low against the S&P 500 which gained nearly 75% – the share dominates the market as a whole by a considerable margin. and is trading 8% above its pre-Covid-19 peak in February 2020. The bank has outperformed the consensus earnings estimate in each of the past three quarters, which has shaped a positive outlook for investors towards action. While its revenue suffered in 2020 – down 6% year-on-year to $ 85.5 billion, its Global Markets segment grew 20% year-on-year on higher sales and trade. and income from investment banks. This somewhat offset the negative impact of an 11% drop in net interest income due to headwinds in interest rates. In addition, it reported a 96% decline in provisions for credit losses in its fourth quarter results on a sequential basis – from $ 1.4 billion to $ 53 million, and released approximately $ 828 million in reserve for loan losses. This means that the bank perceives an improvement in the risk of default.

Bank of America has a large loan portfolio – $ 886 billion in consumer, business and wealth management loans, according to 2020 figures. In addition, net interest income contributes about 50% of total income . Therefore, small changes in interest rates can have a big impact on its turnover. The bank suffered in 2020 due to a lower interest rate environment, which, although improved in recent months, is still below pre-Covid-19 levels and it is unlikely that he’s experiencing a full recovery anytime soon. In addition, the main support for BAC’s revenues in 2020 has been a significant rise in global markets, driven by higher trading volumes and growth in underwriting volume. However, as the economy improves, both higher trading volumes and trading volume are expected to normalize in subsequent quarters, which will hurt the segment of global markets. Overall, these two factors will limit Bank of America revenues to around $ 85.1 billion for fiscal 2021. On the flip side, with the expected massive availability of the Covid-19 vaccine and the economy recovering, the risk of default is expected to improve. This is likely to result in a favorable decrease in provisions for credit losses, thereby increasing the profitability of the bank. Additionally, BAC’s P / E multiple has dropped from around 9x in 2018 to almost 16x in 2020. While the company’s P / E is just below 20x now, that leaves some room for downside when the current P / E is compared to levels seen in recent years – P / E multiple of approximately 16x at the end of 2020. Our dashboard “What factors caused Bank of America stocks to change 53% from late 2018 to today?” provides the key figures of our thinking.

[Updated 12/30/2020] Despite interest rate headwinds, Bank of America stock remains a good investment

After gaining more than 60% from the low on March 23 of this year, at the current price of $ 30 per share, we believe Stock Bank of America (NYSE: BAC) has even more room for growth. Bank of America, one of the top five banks in the US, saw its stock drop from $ 18 to $ 30 from the recent low to the S&P which has traded around 65% – stock is slightly down lagging behind in wider markets and is still down 15% CUMULATIVE TO DATE. This could be attributed to lower than expected third quarter income and lower net interest income due to a lower interest rate environment – nine-month cumulative income of $ 65.4 billion. were 5% lower than net interest income. In addition, the allowance for credit losses increased to $ 11.3 billion for the nine months, compared to $ 2.6 billion for the same period of the previous year, mainly due to the risk higher default on outstanding loans.

Bank of America shares have partially reached where they were before February’s decline due to the coronavirus outbreak turning into a pandemic. Despite rising from March 23 lows, we believe the company’s stock still has potential as its historic P / E multiple means it still has some way to go.

The company’s revenue hovered around $ 91.2 billion in 2018-19, however, the net profit figure declined 3% during the same period. This is mainly explained by a slight decrease in the net profit margin from 30.8% in 2018 to 30.1% in 2019.

While the company experienced stagnant revenue growth over 2018-2019, its P / E multiple increased. We believe the stock should see some upside despite the recent rebound and potential weakness from a recession triggered by the Covid epidemic. Our dashboard “What factors caused Bank of America stocks to change 22% from late 2018 to today?” has the underlying numbers.

Bank of America’s P / E multiple fell from just over 9x in 2018 to around 13x in 2019. The company’s P / E suffered from declining Q2 and Q3 revenue and is just right below 11x now. This leaves some upside room for maneuver when the current P / E is compared to levels seen in recent years – a multiple of P / E of around 13x at the end of 2019.

So where is the action headed?

Bank of America is very sensitive to a drop in interest rates given the bank’s large deposit and loan portfolio. Therefore, the Federal Reserve’s zero rate policy in response to the Covid-19 crisis is likely to put pressure on the bank’s net interest income. Also, as the economy moves closer to normalcy, higher trading income due to a surge in market activity is expected to normalize in the coming months. Overall, Bank of America revenues are unlikely to see an immediate recovery in the short term. However, as the economic situation improves, the loan repayment capacity of businesses and retail customers is expected to recover, which will result in a favorable decrease in provisions for credit losses. In addition, the bank is expected to launch its share buyback program in 2021. These two factors are likely to have a positive impact on Bank of Americaprofitability and profits, giving a boost to its action.

Actual recovery and its timing depend on wider containment of the spread of the coronavirus. Our dashboard Trends in Covid-19 cases in the United States provides insight into the spread of the pandemic in the United States and contrasts with trends in Brazil and Russia. Following the Fed’s stimulus – which set a floor on fear – the market was ready to “look through” the current period of weakness and take a longer-term view. With investors focusing their attention on the 2021 results, valuations become important in finding value. Although market sentiment may be volatile, and evidence of a rise in new cases could scare investors again.

While Stock Bank of America May have moved, 2020 has created many price discontinuities which may offer interesting trading opportunities. For example, you will be surprised at how the valuation of stocks for Amerco vs. Central Garden & Pet shows a disconnect with their relative operational growth. You can find a lot of them discontinuous pairs here.

See everything Trefis price estimates and Download Trefis data here

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Small Business Administration Expands and Extends COVID-19 Loan Program https://thedigitalsanctuary.org/small-business-administration-expands-and-extends-covid-19-loan-program/ https://thedigitalsanctuary.org/small-business-administration-expands-and-extends-covid-19-loan-program/#respond Wed, 07 Apr 2021 23:16:30 +0000 https://thedigitalsanctuary.org/small-business-administration-expands-and-extends-covid-19-loan-program/

WASHINGTON – The United States Small Business Administration (SBA) is expanding its COVID-19 loan program starting the week of April 6.

The SBA is increasing the maximum loan amount to $ 500,000 from $ 150,000 under the Economic Disaster Lending Program (EIDL) and extending the economic hardship period to 24 months from the current six months.

“More than 3.7 million businesses employing more than 20 million people have found financial assistance through SBA Economic Disaster Loans, which provide low-interest emergency working capital to help save their businesses, “said Isabella Casillas Guzman, director of the SBA.

“However, the pandemic has lasted longer than expected and they need larger loans. Many have asked the SBA to remove the $ 150,000 cap,” she said.

Businesses that receive a loan below the current limit of $ 150,000 do not need to request a raise. The agency will contact you by email to provide more details. Loans considered when the new limits take effect on April 6 will automatically count towards the increases.

The latest changes to EIDL follow a recent decision by the SBA to extend the deferral of all disaster loans until 2022.

Questions can be directed to [email protected] or 800-659-2955. The phone number is 800-877-8339 for the deaf and hard of hearing.

EIDL program loans have a fixed rate of 3.75% for businesses and 2.75% for nonprofit groups. The term is 30 years, but there are no penalties or prepayment charges. EIDLs differ from Paycheck Protection Program loans in that they must be repaid.


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