The company has a strong balance sheet, trades at 17 times earnings and yields 4.7%.
Another is the need for European banks to slim their balance-sheets: trade finance, because of its short-term nature, is easy to prune.
Hong Kong lacks an equivalent to the bulletin board, or "pink sheets," trading for very cheap or delisted stocks in the United States, so the proposal prompted a rout the next day that erased a tenth of the market value of penny stocks here, or $1.3 billion.
The five firms, which declined to discuss their plans for this story, have some of the biggest balance sheets, trading desks and derivatives portfolios of financial institutions in the United States.
While the trading loss is not likely to blow a hole in JPMorgan's balance sheet, the trades could continue to spill red ink for months, costing the bank several billion dollars.
They "used their massive balance sheets to trade derivatives and take huge risks".
Often they can't compete with the bulge-bracket firms that wield big balance sheets for trading and lending, because they can't afford comparable year-end bonuses and share options for new hires.
That bad loans were, ultimately, the problem can be seen in the fact that, as the economists Christian Laux and Christian Leuz write, "of the 31 bank holding companies that failed and were seized by U.S. bank regulators between January 2007 and July 2009, loans and leases accounted for roughly three-quarters of their balance sheets, and trading assets essentially played no role".
Despite having one of the sector's lowest costs for both finding and lifting natural gas and one of the stronger balance sheets, Patina trades at 9 times trailing 12-month earnings, a discount to its peers.
Joining firm balance sheet data and trade data, Dai et al. (2016) argue for relatively low total factor productivity (TFP) of processing trade.
