This bank operates in the region around New York. In its catchment area property prices are down just 7.8 per cent versus between 20 and 30 per cent in more exposed areas like Miami, Las Vegas and California.
The bank doesn’t do sub prime loans and the average loan to value on the loans it does make is a conservative 61 per cent. Bad debts have gone up from 0.07pc to 0.25 per cent. The credit crunch is positively helpful because of a dramatic widening of loan spreads boosting profitability and helping the bank win market share.
The numbers make clear that this is a well run traditional bank with a loan book to die for. Since calendar 1999 pre-tax profits have increased from $171m to $487m with the growth rate showing every sign of accelerating.
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