RBC Capital Markets' Gerard Cassidy: Resiliency of consumer credit quality prevails

Financial Performance - Bank results were quite good, particularly regarding the resiliency of consumer credit quality [1] - Goldman Sachs' numbers were very strong, especially in equity trading and M&A activity [4] - Year-over-year loan growth has started to pick up for banks in the second quarter [6] Market Trends & Activities - M&A and ECM activity picked up, particularly at the end of the second quarter [2][3] - Loan growth is starting to pick up, evidenced by weekly H8 data from the Fed [6] - There's a broadening of the possibility when it comes to acquisitions, though with a high bar [12][13] Regulatory Environment - The regulatory approach is becoming less onerous, evidenced by changes to the supplementary leverage ratio and positive stress test results [8][9] - Basel 3 endgame final capital rules are expected to be less onerous than the original proposal [9] - The ability for banks to give back more excess capital is increasing [10] Investment Outlook - Some deregulation benefits are factored into stock valuations, but not entirely due to uncertainty about the Basel 3 endgame [11] - High valuations and excess capital levels could lead to more acquisitions by large investment banks or regional banks [13]