Jakub Rochlitz @TheDividendFund: "𝗪𝗶𝗹𝗹 𝗕𝗮𝗻𝗸𝘀 𝗕𝗿𝗶𝗻𝗴 𝗗𝗼𝘄𝗻 𝗧𝗵𝗲..."

Slovakia

𝗪𝗶𝗹𝗹 𝗕𝗮𝗻𝗸𝘀 𝗕𝗿𝗶𝗻𝗴 𝗗𝗼𝘄𝗻 𝗧𝗵𝗲 𝗘𝗰𝗼𝗻𝗼𝗺𝘆? 📉 That’s what Wall Street worried about this morning, after quarterly reports from two regional banks — $ZION (Zions Bancorp NA) and $WAL (Western Alliance Bancorporation) — raised fresh concerns about credit quality across the economy. Both banks reported rising bad loans, and as often happens in banking, fear spread quickly (remember 2023?). Combined with some negative headlines from the private credit market, bank stocks sank sharply today before recovering slightly in the evening. Regional banks were hit hardest. In our portfolio, we hold positions in two banks — but we’re well insulated from this trouble. The banks we own, $JPM (JPMorgan Chase & Co) and $BNP.PA (BNP Paribas SA), are the largest players in their home markets. Unlike smaller peers, they can benefit from a banking crisis. They are highly capitalized, capable of absorbing losses, and — crucially — are first in line for government support if things deteriorate. When First Republic collapsed within days in 2023, it was $JPM that stepped in to acquire its assets (with central bank support) at a steep discount. Similarly, in Switzerland, $UBS (UBS Group AG) — backed by the government — took over Credit Suisse when it collapsed from panic. The banks benefited massively from these deals. When there’s trouble in banking, the big usually eat the small. That’s exactly why we own the big ones. Less drama, less risk — and still, $JPM is up 23% this year and $BNP.PA is up 26%, both doubling the market’s performance. Enjoy your Friday evening — and don’t lose sleep over the banks. Jakub