Savings and Loans Sector Under Pressure to Maintain Hefty Dividends
April 06 2011 - 8:16AM
Marketwired
In recent quarters most companies in the Savings and Loans industry
have been setting aside less money to cover loan losses. More
thorough and cautious credit checks have led to fewer delinquent
loans and greater financial stability. While the improving margins
helped narrow losses among these banks, long-term growth worries
still loom. Loan growth has steadily declined due to economic
uncertainties. As evident from the high unemployment numbers,
companies are not hiring at the pace most analysts expected, while
capital spending is way down. The Bedford Report examines the
outlook for companies in the Savings & Loans Industry and
provides research reports on Hudson City Bancorp, Inc. (NASDAQ:
HCBK) and New York Community Bancorp, Inc. (NYSE: NYB). Access to
the full company reports can be found at:
www.bedfordreport.com/2011-04-HCBK
www.bedfordreport.com/2011-04-NYB
When Hudson City Bancorp reported a year on year drop in profits
in its most recent quarter, the company warned that unemployment
and the increased role of government-owned companies in the
mortgage market may weigh on its results moving forward.
Housing market reform could create opportunities for companies
in the savings and loans industry with marginal debt issues.
Smaller banks may be able to originate more housing loans as
Washington mulls its options regarding government sponsored
enterprises.
The Bedford Report releases regular market updates on the
Savings and Loans Industry so investors can stay ahead of the crowd
and make the best investment decisions to maximize their returns.
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Hudson City Bancorp is known for paying one of the largest
dividends in the banking sector. The company currently pays an
annual dividend of 60 cents for a yield of around 6.2 percent.
Following an announcement from the company last month explaining
that it that it had completed a restructuring of its balance sheet
in order to lower the company's interest rate risk, there is
concern that the bank may be forced to lower its dividend.
HCBK industry peer New York Community Bancorp currently pays an
annual dividend of $1.00 for a yield of approximately 5.8
percent.
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