Tuesday, March 25, 2014

Mutuals Report Confidence in Growth, Easing of Basel III Concerns

Most mutual institutions expect sustainable and improving business line activity in the next three years, according to the results of an ABA Mutual Bank Survey released yesterday during ABA’s Mutual Community Bank Conference in Washington, D.C.

Ninety-five percent of respondents, 88% of which had assets of less than $1 billion, said they expect commercial loan activity to increase or stay the same. Similar numbers (87%) said the same of consumer loans and residential mortgage loans.

Mutuals concerned about maintaining adequate capital under Basel III fell dramatically, dropping from 54% last year to 32% this year. One-third of mutuals continue to report that their examiners do not understand the concept of mutuality, but nearly three-quarters said their primary regulator is making adequate outreach efforts. ABA EVP Bob Davis said:

Mutuals expressed increasing optimism for improving commercial lending and residential mortgage businesses, and somewhat fewer concerns about the impact of Basel capital constraints compared to a year ago. However, competitive pressures increased interest in consideration of business combinations and partnerships.

Read the survey report.

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