Despite narrowing net interest margins, reported bank profits should still be solid thanks to...

|By:, SA News Editor

Despite narrowing net interest margins, reported bank profits should still be solid thanks to housing's rebound. Mortgage origination income helps, but the big boost will come from improving credit quality. At 1.66% in Q2, mortgage charge-offs remain nearly triple their 20-year average. Then there's loan reserve releases - mocked by some, they nevertheless are earnings that boost capital (maybe allowing bumps in dividends and share repurchases).