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Banks to see net interest income growing, fees falling, credit fine in Q2, analysts say

Jul. 12, 2022 5:22 PM ETSCHW, AXP, BAC, JPM, GS, C, COF, FITB, MS, BLK, WFC, USB, BK, NDAQ, CMA, MTB, RF, KEY, STT, NTRS, PNC, HBAN, TFC, BX, DFS, FRCB, ALLY, SYF, CFG, OZK, SICPBy: Liz Kiesche, SA News Editor9 Comments

Business and Finance, Looking Up at High Rise Office Buildings in the Financial District of a Modern Metropolis

R.M. Nunes

Against the backdrop of an increasingly hawkish Federal Reserve, banks will start reporting Q2 earnings on Thursday. The higher rates are good for net interest income, but bad for lending businesses as the increased cost of capital tamps down demand.

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Comments (9)

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I learned a new word today. However, I was gobsmacked to find that Hans Olsen's comment doesn't appear in this version of the article.
This has been a complete turd for centuries. Like most banks
GR Value profile picture
Banks are highly complicated creatures. I think they are at fair value but are VERY unpredictable. The very fact that debt is being devalued by long overdue rising pay or costs might impair the loan systems. Also cheap deposits will dry up. Also, the stagflation situation really puts to question certain business.

I would be negative if banks weren't down so much but I generally view them as neutral here, basically just at fair value. In 2-3 years I might change my opinion.
threepalms2013 profile picture
The next 5 quarters will begin to display the true earnings potential for WFC.
craftbrewinfo profile picture
@threepalms2013 how many years have people been clinging to this hope? Always next year with WFC
Do you think JD feels pressured to try to be clever?
Wonder what he’ll say Thursday to hammer the pps again.
MoneyPig profile picture
I don't buy the loan loss story. Wait till the loan losses start coming in. It is like we are trying to con ourselves into thinking the popping of the stimulus bubble is the recession. Back in March 2020 WFC reported a NINE BILLION loan loss in one quarter. BAC was much the same.

I am not running out to buy any bank. This time is magical? When people need money they don't pay some debts and make tough decisions like selling their expensive house or getting rid of car. That is hownit has always been before the government started bailing society out.
Number7 profile picture
@MoneyPig not really accurate... They may have set aside large numbers for potential loan losses , but the losses never materialized. They later reversed those reserves in large part. Contrary To popular opinion on here, banks were fairly profitable places throughout the entirety of the pandemic. One can argue about stimulus effect etc etc, but the truth is banks did not hemorrhage money at all during The covid lockdowns and time that followed
@Number7 very true comment, they were anticipating a total melt down of loans!!! Thanks to Uncle Sam, banks skated by!!!
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