Financial Services Roundup: Market Talk

Dow Jones
Oct 07

The latest Market Talks covering Financial Services. Exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1250 ET - There were an estimated 72.3% more condo sellers than buyers in August, according to Redfin. That's the fifth straight month in which there have been at least 70% more condo sellers than buyers in the U.S. housing market. That makes spring and summer 2025 the strongest buyer's market for condo buyers since 2013, with the exception of April 2020. There are several reasons why there aren't nearly enough condo buyers for all the condos on the market: high costs; new condo rules and regulations; the threat of devaluation; investor exits; and Florida. Florida has about 1.5 million condos. The rising costs and new rules, along with intensifying natural disaster risks, are causing many Florida condo owners to list and pushing buyers away. There are also a fair amount of new condo buildings adding to supply. (chris.wack@wsj.com)

1242 ET - Fifth Third's acquisition of Comerica will cement the bank's leadership in the Midwest, while expanding its presence in quickly growing markets, executives say on a call with analysts. The deal will add density in Michigan, making Fifth Third the leading bank in retail deposits across the state and in Detroit, "the one large metro area in Fifth Third's Midwestern footprint where we are not top five today," CEO Tim Spence says. The deal will also accelerate growth and market share in Texas and California. The bank, which has been building out in Southeast markets, says it plans to open 150 new locations in Texas by 2029. "When completed, over half of our branches will be in the higher-growth Southeast, Texas and Arizona markets," CFO Bryan Preston says. (connor.hart@wsj.com)

1220 ET - Fifth Third Bancorp's $10.9 billion acquisition of Comerica will provide significant scale benefits and strengthen Fifth Third's commercial banking operations, CFRA Research analyst Alexander Yokum says in a note. Still, he worries Comerica's geographic footprint, which is concentrated in Michigan and California, will slow Fifth Third's shift into Southeast markets. And Comerica comes with operational challenges such as stagnant loan growth and elevated deposit costs. "Fifth Third will face integration challenges as it works to turnaround Comerica's underperformance," Yokum writes. (connor.hart@wsj.com)

1149 ET - TD Cowen evaluates M&A deals using two key metrics: financial impact and long-term growth potential. In terms of financial impact, Fifth Third Bancorp's $10.9 billion acquisition of Comerica is a home run, TD Cowen analysts say in a research note. The deal will boost per-share earnings and increase efficiency. "From this vantage point, this is one of the most financially attractive bank transactions that we've seen in decades." The worry lies in growth potential. Comerica recently received pressure from an activist investor because its growth metrics lagged peers. Fifth Third will be tasked with unlocking Comerica's value to support long-term growth, the analysts said. (connor.hart@wsj.com)

1136 ET - Fifth Third Bancorp's stock has regained its losses, after initially falling when the regional lender said it would acquire competitor Comerica in a $10.9 billion all-stock deal. Truist analysts in a research note attribute the increase to touts from investors who claim the tie-up could boost earnings to over $5 a share once complete. "Still, others have pushed back on the execution risk," the analysts write, noting that building out Southeast and Texas branches while simultaneously retaining talent and cutting 35% of expenses is a full plate. Shares edge 0.3% higher after falling more than 4% premarket. (connor.hart@wsj.com)

0523 ET - Shawbrook's initial public offering could be attractive for investors, AJ Bell analyst Dan Coatsworth writes in a note. The British digital bank plans to return to the stock market after it went private in 2017. The move is seen as an exit route for its private-equity backers. The IPO also represents an opportunity to attract a broader pool of investors for growth funding, he says. "The U.K. stock market has a wealth of opportunities in the financial services sector and it's a vote of confidence that Shawbrook has chosen to return to this exchange," he adds. (najat.kantouar@wsj.com)

0452 ET - Banks and infrastructure shares lead the declines among French stocks, after French Prime Minister Sebastien Lecornu resigned after only one month in office. Societe Generale shares fall 6.5%, while BNP Paribas and Credit Agricole lose 5.6% and 5.4%, respectively. Meanwhile, construction companies Vinci and Bouygues drop 3.6% and 4.0%, respectively. Resource-management company Veolia Environment dips 4.5%. (nina.kienle@wsj.com)

0416 ET - France's blue-chip index sank deeper in Monday morning trade after Prime Minister Lecornu resigned just three weeks into the role. On Sunday, President Macron named a new cabinet made up of 18 new ministers, out of which 13 were reappointed. "Opposition parties have strongly criticized these appointments for not representing the promised breakthrough," UniCredit's Bucco says in a research note. The CAC 40, which underperformed other European indices shortly after market open, sank further after the announcement that Macron accepted Lecornu's resignation and is down 2%. If France's government falls, the country will likely operate under a special law, maintaining spending near the 2025 framework, with a deficit of roughly 5.0% to 5.4% of GDP, Deutsche Bank's economist Yacine Rouimi estimates. French banks extended losses, with Societe Generale down 7% and Credit Agricole shedding roughly 5%. (elena.vardon@wsj.com)

1913 ET - The risk of a benign U.S. hurricane season is on the rise, and that's good news for QBE Insurance, says UBS. Historical trends indicate that approximately 75-80% of hurricanes typically form by end-September. However, analyst Kieren Chidgey notes that the 2025 season shows significantly lower activity compared to this pattern. No major hurricanes have affected the U.S., and 3Q has been favorable for QBE so far. "While too early to adjust catastrophe cost estimates, we see growing upside risk to FY 2025 EPS on this front though note this could fuel further rate softening across RI and Property classes in FY 2026," UBS says. (david.winning@wsj.com; @dwinningWSJ)

1906 ET - UBS thinks investors in Challenger would be skeptical of any attempt to buy a partial stake in Pepper Money. Media reports suggest there's interest in a deal, but no formal offers have been made. Analyst Kieren Chidgey says Pepper would expand Challenger's loan origination capability. That would support a greater focus on fixed income following proposed revisions by regulator APRA to annuity capital requirements. Still, UBS believes investors would prefer regulatory capital releases to be diverted into share buybacks. "As such, we view the possibility of Challenger acquiring a stake in Pepper Money as a potential downside catalyst," UBS says. (david.winning@wsj.com; @dwinningWSJ)

1731 ET - Bank of Queensland's bear at Jefferies highlights three themes for the lender to address at its FY 2025 result on Oct. 15. It wants to know how protected BOQ's net interest margin has been given weak balance sheet growth and a shift toward business lending. It's also seeking an update on funding and BOQ's capital. "Given BOQ has now walked away from its previous return-on-equity targets, we think our FY 2025-2027 average ROE forecast of circa 6.5% can only justify a payout ratio at the bottom end of the current target range," Analyst Andrew Lyons says. "As such, we will be looking for any update on this target." Jefferies expects BOQ to raise its final dividend by 1 Australian cent to A$0.18/share. It retains an underperform call on BOQ. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

October 06, 2025 16:50 ET (20:50 GMT)

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