TD Bank Grinds Higher

Although TD Bank has posted profits that are up 23%,CEO Ed Clark feels that the environment has soured.For instance,there is the Durbin amendment that we have to absorb.
The Durbin amendment restricts the fees that big banks operating in the U.S. can charge merchants for processing transactions made with their debit cards.The fees would be reduced from about 44 cents per swipe to 21 cents per swipe,resulting in a revenue loss to the banks of more than 16.1 billion dollars.The amendment is slated to go into force in October.
Tough environments actually widen the difference between excellent franchises and not so excellent franchises.We run this very simple model with longer hours;seven days a week;and spectacular service:you just relentlessly take market share that way.Our mortgage book is up 39% in the U.S.
On the other hand,there are a whole lot of political changes that,over time,will grind the banking system down;that,over time,will prevent banks from giving strong support to the economy.If you impose a form of tax-we're quite committed to the U.S.,but we shouldn't underestimate the grind that we're feeling right now.
TD Bank isn't focused on mergers and acquisitions.Taking market share has to be the core of your business strategy,but you add little parts you need by acquisition,Mr.Clark explained.
Toronto-Dominion Bank(TD)

The New Financial Rules

There are 300-500 new rules that enact financial legislation that were written without regulators,points out Robert Albertson,chief strategist at Sandler O'Neill.It's starting to get clearer as implementation begins.There's a lot that has to go on till this is sorted out.By this summer,it will be visible.
In banking,you've got loan growth again.It's meager and sluggish,mirroring the overall recovery.There are still a lot of sick banks.They are small banks,Mr.Albertson explained.
The federal program for encouraging small business lending isn't working well.Bankers say there aren't enough applicants for the loans.As well,they require a lot of paperwork,which means the banks would have to hire additional staff,decreasing the profitability of the program.
Sandler O'Neill is an independent,full service investment banking firm.It has been advising financial companies for more than 20 years.

Egypt Edition:Banks Reopening,More Talks On

Starved for cash since January 27,two days after the uprising began,Cairo residents and businesses visited banks that reopened on Sunday.One bank had a line of about 50 people outside the door.Businesses had complained that they needed to withdraw money to repay their creditors.The central bank did impose some limits,however,restricting the amount individuals can withdraw,but not businesses,according to Ahmed Ismail,manager at Abu Dhabi National Bank.
Christians planned to celebrate Mass in Tahrir Square Sunday in remembrance of those who died in the course of the protests,and Muslims said they would form a protective ring around the Christians.The UN estimates up to 300 people were killed in the uprising.
The Muslim Brotherhood said it would meet with Vice-President Omar Suleiman,having earlier declined to do so till Mubarak resigned.The Muslim Brotherhood is an umbrella group of Islamists who favor conservative sharia law for Egypt,but insist they are democratic in pursuit of their goals.
In general,much of the populace is getting restless and more determined to return to work on Sunday,the first day of the work week in predominantly Muslim countries such as Egypt.From fishermen to bankers,they feel the reform process is underway enough now and they need renewed cash flow in order to survive.

Banks Should Open Up

It's critical to have our major banks lending,Mr.Paulson stated.They can't be hoarding capital.Were it not for the actions by the Federal Reserve and Federal Deposit Insurance Corporation taken to date,lending would be even less than it is today.Most people say the banks aren't lending enough.Although we don't want to nationalize our banking system,you're gonna continue to see us do more to encourage banks to lend more.Regardless of what you do,banks are not gonna lend as much as you would like.That's what banks do in such conditions,Mr.Paulson admitted.

Libor Is Down

The London Interbank Offered Rate,or Libor,has been declining recently.From well over 4%,the 3-month rate has fallen to 3.83% as of this morning.It is the rate banks charge each other for loans,and its decline indicates a thawing of the credit markets.Governmental action around the world is beginning to have a positive effect on the banking system.

The Legacy of the Crisis

The banking system is at the heart of every market economy;where we're going to is a world where the banking system is slimmer,de-risked,and with less return on equity,Mohamed El-Erian believes.We are turning the banking system into a utility,because the public cannot accept privatizing gain,while socializing risk.When the tide comes down,it exposes good things that you want to buy,but you've shaken the trust of the retail side.It will take time to heal.We shouldn't expect a linear recovery;it's gonna be a bumpy recovery,Mr.El-Erian predicted.

Of Things Known and Unknown

U.S. Treasury Secretary Paulson admitted that the thing we don't know is,is there fraud going on,is there collusion.I won't have a view until I see the evidence,Mr.Paulson stated.Naked short-selling is wrong anywhere.Our banking system is safe and sound.I don't think you're going to see any insured depositors lose a penny.The most important thing we can do to support the dollar is have confidence in our economy,he added.In a black suit,light blue shirt and red tie,and seated before a backdrop of U.S. Treasury seals,Mr.Paulson held that America's long term prospects are strong compared with any other economy.