While a slump in U.S. bank performance is expected to continue for the balance of the year, at least one key metric for banks isn’t seen as getting any worse, analysts at Fitch Ratings said in a research note on Friday. Facing slower economic growth and pressure from inflation, U.S. bank performance in the second-quarter mostly weakened, as the cost of holding deposits continues to rise more quickly than the interest they collect on loans.
This compression in net interest income is expected to persist for the rest of the year particularly for small and mid-sized lenders, but at a slower pace. “Increases in funding and credit costs, should be offset by a modest recovery in fee income and better operating efficiency,” Fitch Ratings said. Also read: Bank asset quality, weaker profits spark Moody’s reviews and downgrades as it weighs potential 2024 recession Not all banks are expected to see a squeeze in their net interest income. MarketWatch Deep Dive columnist Philip van Doorn highlighted 10 regional banks within the S&P Regional Banking ETF
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that are expected to widen their net interest margins by double digits in 2024. See:Deep Dive 10 regional banks expected to buck a weak industry trend Banks are expected to continue to deal with deposit costs that are rising more quickly than as …
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This compression in net interest income is expected to persist for the rest of the year particularly for small and mid-sized lenders, but at a slower pace. “Increases in funding and credit costs, should be offset by a modest recovery in fee income and better operating efficiency,” Fitch Ratings said. Also read: Bank asset quality, weaker profits spark Moody’s reviews and downgrades as it weighs potential 2024 recession Not all banks are expected to see a squeeze in their net interest income. MarketWatch Deep Dive columnist Philip van Doorn highlighted 10 regional banks within the S&P Regional Banking ETF
KRE
that are expected to widen their net interest margins by double digits in 2024. See:Deep Dive 10 regional banks expected to buck a weak industry trend Banks are expected to continue to deal with deposit costs that are rising more quickly than as …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]