At Calcbench, we are always looking to help our clients get more information from financial data than they have in the past. Here is yet another example. Because of the power of tagged data through, XBRL, we have access to the footnotes of every public company in America. We decided to look at the top 10 American deposit taking banks, as measured by Assets. Next, we collected the Loans Receivable that each of these firms has reported over the last 14 quarters and the fees that each firm has generated from these loans. We charted the ratio of these numbers to give us the implied profitability of the loan book. We have annualized the numbers for comparability. The results are below:
*(All Returns Annualized for comparability)
Do these results imply anything about the credit quality of the loans that certain banks are making? At a cursory glance, we would say that it does appear that Capital One (top, blue line) and Citigroup (gray line)are generating bigger income from their loans than any of their peers. The Citigroup loan book is the smallest of the Big 4 banks (Wells Fargo, Bank Of America and JP Morgan), but they do generate most more income from their book than the others (credit card business). Capital One, has a large credit card business and therefore the biggest income as a percent of their loan book.
This seems pretty straightforward to us. Anyone want to comment?