RankingBanking Web Pageturn - Flipbook - Page 8
6
How Investors
View the Best
Banks
By Emily McCormick
I
t wasn’t too long ago that investors
of what … investors say.”
and analysts thought East West Bancorp
With a tangible common equity ratio of 8.67%
had too much capital, says Irene Oh, chief
at the end of 2022, East West’s capital levels
financial officer at the Pasadena, Califor-
don’t look excessively high. But the bank, with $64
nia-based bank. Why didn’t East West use
billion in assets at year end, had the highest TCE
that money to buy back shares? While the
ratio among banks above $50 billion in assets in
bank executed some “modest” buybacks,
Bank Director’s RankingBanking analysis. The
management didn’t want to dip capital
median for this group of big banks was 5.85%,
to a level it deemed imprudent — that wouldn’t
and 7.62% for all banks in the study, which ranks
serve shareholders’ long-term interests. “A bank
the performance of the 300 largest publicly traded
is a leveraged company. It’s a leveraged, balance
banks by rating profitability, asset quality, total
sheet business, and the actual capital that you
shareholder return and capital adequacy for 2022.
have matters,” she explains. “The bank manage-
Lately, Wall Street hasn’t treated banks well —
ment team needs to manage the bank, regardless
including the industry’s top performers. The top 25