Banks beat Mag 7 as rates and dealmaking lift profits: RBC’s Gerard Cassidy
December 24, 2025 • 5m 34s
Frank Holland (Anchor)
00:00.150
what's
leading
to
this
rally
when
we're
looking
at
financials
is
it
simply
the
idea
of
rate
cuts
or
some
other
factor
here
i
think
there's
Gerard Cassidy (Co-Head of Global Finance Research)
00:06.470
a
combination
of
factors
frank
but
rate
cuts
are
certainly
front
and
center
a
steeper
yield
curve
is
very
positive
for
lenders
and
when
you
think
about
it
frank
you
got
to
go
back
twenty
years
where
we
had
a
fed
funds
rate
at
over
three
percent
with
a
positive
slow
curve
of
Gerard Cassidy (Co-Head of Global Finance Research)
00:24.230
seventy
five
to
a
hundred
basis
points
we're
not
there
yet
the
three
month
and
a
ten
year
but
if
the
fed
cuts
once
or
two
more
times
going
into
june
of
next
year
we
could
see
that
type
of
yield
curve
so
that's
been
the
main
driver
but
second
it's
also
the
deregulation
that
this
Gerard Cassidy (Co-Head of Global Finance Research)
00:41.430
administration
has
brought
to
the
banking
industry
and
that
has
also
been
another
factor
playing
into
this
and
third
the
capital
markets
business
in
twenty
twenty
five
was
very
strong
which
really
led
to
the
strength
in
the
money
center
banks
and
the
investment
banks
you
know
Frank Holland (Anchor)
00:55.310
the
last
couple
quarters
we've
seen
very
strong
trading
revenues
and
outcomes
for
a
lot
of
the
big
banks
a
lot
of
that
due
to
the
volatility
however
we
seem
to
be
coming
down
a
bit
going
into
the
new
year
do
we
need
to
see
are
the
banks
need
to
the
volatility
to
continue
to
see
Frank Holland (Anchor)
01:08.990
those
kind
of
revenues
or
are
there
other
parts
of
the
business
do
you
expect
a
seller
to
accelerate
in
the
new
year
a
lot
of
people
look
at
the
IPO
market
possibly
picking
up
and
there
is
some
some
backlog
due
to
the
government
shutdown
so
early
on
we'll
more
than
likely
see
it
Frank Holland (Anchor)
01:20.350
but
what
are
what
are
some
of
the
like
the
tailwinds
for
banks
that
maybe
are
a
little
bit
under
the
radar
there's
Gerard Cassidy (Co-Head of Global Finance Research)
01:26.590
a
couple
of
things
frank
and
you
put
your
thumb
on
it
in
the
capital
markets
business
now
volatility
is
always
good
for
trading
and
if
it's
less
volatile
you
may
be
the
trading
numbers
come
in
a
little
less
than
expected
but
on
the
investment
banking
side
you
know
the
ECM
Gerard Cassidy (Co-Head of Global Finance Research)
01:42.030
business
equity
capital
markets
which
was
where
the
IPO
business
sits
the
initial
public
offerings
we
anticipate
that
the
initial
public
offerings
could
have
a
strong
first
quarter
of
next
year
particularly
because
of
the
government
shutdown
this
year
in
the
fourth
quarter
Gerard Cassidy (Co-Head of Global Finance Research)
01:57.390
pushed
i
think
a
handful
or
number
of
those
IPO
's
into
the
first
quarter
the
advisory
business
that's
M
and
A
this
administration
is
very
open
to
supporting
industries
consolidating
therefore
not
just
in
the
banking
industry
but
all
industries
but
the
other
part
of
the
equation
Gerard Cassidy (Co-Head of Global Finance Research)
02:15.870
is
lending
i
think
you're
going
to
find
that
lending
is
going
to
pick
up
the
nominal
GDP
number
yesterday
if
i
recall
correctly
was
over
eight
percent
now
lending
going
back
seventy
five
years
in
this
country
when
you
compare
the
growth
of
nominal
GDP
to
bank
lending
it's
about
Gerard Cassidy (Co-Head of Global Finance Research)
02:34.310
a
one
to
one
relationship
so
loan
growth
could
accelerate
that's
the
big
surprise
potentially
in
twenty
twenty
six
all
right
Frank Holland (Anchor)
02:41.590
so
you
see
the
potential
for
loan
growth
acceleration
i
also
want
to
talk
to
you
about
M
and
A
i'm
thinking
comerica
i'm
thinking
synovus
and
its
merger
are
you
expected
to
see
more
of
that
and
are
there
certain
regions
that
are
more
likely
to
see
this
M
and
A
are
there
certain
Frank Holland (Anchor)
02:53.800
lines
of
business
because
everybody
's
been
talking
about
ma
but
not
really
the
rationale
behind
it
like
what's
gonna
make
a
big
bank
want
to
acquire
a
smaller
bank
yeah
Gerard Cassidy (Co-Head of Global Finance Research)
03:03.430
the
frank
is
a
good
question
and
bank
M
and
A
has
been
going
on
our
entire
careers
and
if
you
go
way
back
to
the
early
eighties
we
had
about
eighteen
thousand
banks
and
thrifts
in
this
country
we're
down
to
about
forty
three
hundred
and
so
that
trend
is
it's
not
linear
but
it
Gerard Cassidy (Co-Head of Global Finance Research)
03:19.230
goes
in
you
know
peaks
and
valleys
and
we're
currently
entering
a
peak
period
last
year
or
twenty
twenty
five
M
and
A
was
very
strong
in
banking
we
expected
to
remain
that
way
in
twenty
twenty
six
now
we
haven't
seen
many
big
deals
you
mentioned
already
the
comerica
fifth
third
Gerard Cassidy (Co-Head of Global Finance Research)
03:35.390
deal
which
was
a
big
deal
at
a
very
good
deal
if
we're
the
combined
companies
in
our
opinion
the
synovus
pinnacle
deal
was
the
big
deal
but
that's
a
merger
of
equals
as
they
call
it
and
the
market
didn't
react
favorably
to
that
transaction
but
we
should
see
more
deals
because
of
Gerard Cassidy (Co-Head of Global Finance Research)
03:51.550
economies
of
scale
to
your
question
why
do
they
do
it
for
economies
of
scale
and
we
anticipate
you'll
see
more
deals
because
again
this
bank
regulatory
environment
is
very
supportive
of
bank
M
and
A
for
example
in
the
last
administration
it
took
twelve
to
fifteen
months
to
close
Gerard Cassidy (Co-Head of Global Finance Research)
04:08.390
the
deal
now
the
deals
are
closing
in
about
four
to
five
months
which
is
very
positive
for
M
and
A
activity
alright
now
it's
Frank Holland (Anchor)
04:15.390
a
shock
we
haven't
said
the
words
artificial
intelligence
yet
during
this
whole
interview
we
talk
a
lot
about
the
fintechs
and
some
of
these
other
companies
getting
into
prediction
markets
and
things
like
that
our
banks
are
they
in
in
in
should
they
be
concerned
or
in
any
way
Frank Holland (Anchor)
04:27.950
about
real
disruption
from
some
other
players
trying
to
enter
their
space
we've
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