[Despegar]

I wonder if the exec team realizes that the ad-tech industry had their Great Financial Crisis. Nobody is in love with them anymore. They'll get as much reception from politicians as Wall Street did when Congress passed Dodd-Frank. Banks don't earn much more than their cost of capital anymore.

[tomrod]

> Banks don't earn much more than their cost of capital anymore.

This doesn't sound right. Can you add some citation or detail?

[Despegar]

Goldman Sachs's return on equity used to average 20-30% before the crisis. Now a decade after the crisis they're glad to be doing more than 10%.

https://i.imgur.com/gtE05WX.png

[elliekelly]

I’m on mobile so I can’t read the numbers on the excel screenshot you provided but the historic high return on average equity for banks[1] (not including brokerage) was 16.29% in 1999. At last measure it was 11.85%. Dodd-Frank was merely a speed bump. The vast majority of banks have long since recovered from the crisis.

[1] https://fred.stlouisfed.org/series/USROE

[Despegar]

That's not a good chart for banks. Their cost of capital is 8-10%, doing 11 or 12% is pretty shitty compared to the pre-crisis era.

And the smaller community banks have less onerous regulations than the big ones. Banks have to be much more capitalized and have less leverage because of Dodd-Frank. That's why the return on equity is mediocre.

[tomrod]

While I'm not personally keen on him, Trump's admin rolled back CCAR to every 4 years, for small book every 6. Expect lower regulatory costs.

[natal59]

Whats the app you used to get so much history

[Despegar]

FactSet

[dmoy]

It isn't right. The majority of banks are profitable, the industry is somewhere around $200B/year of profit (I think that's just retail banking, not including brokerages and stuff).

This is historically high.