New tool helps investors understand corporate structure of U.S. banks

Investors and finance professionals looking to better understand the corporate structure of US banks now have a new tool.

OTC Markets Group recently announced the availability of data that visually displays business structure for over 550 US banks that trade on OTC markets as well as US exchanges. The move creates more transparency for data made available by the Federal Reserve, but which are otherwise difficult for investors to access and inconsumable.

Corporate structure data is particularly useful for financial companies, as these entities can often be made up of multiple layers. This is often the case for banks, many of which are organized as a “bank holding company” consisting of several entities, including an operating bank.

“Often these bank holding companies own non-commercial bank assets that retail investors may not be aware of,” said Matthew Fuchs, executive vice president of market data and strategy at OTC Markets Group. “They believe they are only investing in a working bank. Structure data will give context to the financial statements of bank holding companies and investors can then more easily understand the source of non-commercial bank income and expenses.

The data is the latest set added to Qaravan, OTC Markets’ market data platform for the banking industry. It also includes a visual representation of corporate structure levels, entity names, locations, and ownership percentages, and is available on the respective banks’ profile pages on OTCMarkets.com.

Fuchs added that a lot of work needs to be done to map the relationships of different corporate entities to each other and then map that data to the respective trading symbol and issuer.

For example, this is how the information is displayed for Chesapeake Financial Shares, Inc. (OTCQX: CPKF), a Virginia-based bank with several different layers of its corporate structure, including a bank, an investment group, and an insurance agency.

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Source: OTCMarkets.com

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Source: OTCMarkets.com

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