US regional banks' Q2 profits squeezed by deposit costs, tepid loan demand
By Manya Saini
July 19 (Reuters) -Several U.S. mid-sized and regional banks reported a fall in their second-quarter profit, as income from charging customers interest was squeezed by higher deposit costs and tepid demand for loans.
Most U.S. banks are expecting a decline in net interest income (NII) this year as high interest rates have impeded loan activity, while efforts to retain customers have pushed up deposit costs.
"High interest rates, an uncertain economic outlook and alternative financing challenge continue softening demand for traditional bank lending," said Chris Stanley, banking industry practice lead, Moody's.
"Banks of all sizes must critically examine growth assumptions amid these conditions," Stanley added.
Net interest margin, a key measure of banking profitability that takes into account earnings from interest on loans and payments on deposits, also contracted across the industry for the third straight quarter.
Huntington Bancshares HBAN.O, Fifth Third Bancorp FITB.O, Regions Financial RF.N and Comerica CMA.N joined rivals in reporting lower second-quarter profit on Friday.
Shares in Fifth Third fell 1.5% before the bell, while Regions and Comerica declined 3% and 11%, respectively.
Several banking executives have said they were actively working to lower expenses to counter interest income headwinds.
Lenders' loan books are also under investor scrutiny since turmoil at New York Community Bancorp NYCB.N earlier this year and more recently at First Foundation FFWM.N put the spotlight on stress in the commercial real estate sector, particularly office and multi-family portfolios.
CRE pressures and weakening consumer health amid higher rates have also prompted banks to build up their allowances for credit losses or the buffer of capital lenders put aside to cover potential loan defaults.
The U.S. Federal Reserve's stress test also showed that banks' credit card loans and corporate credit portfolios could be tricky.
Earnings from NYCB and First Foundation late next week will round-out what has so far been a dull second quarter for smaller lenders.
Reporting by Manya Saini, Pritam Biswas, and Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar
Aloqador aktivlar
Eng oxirgi yangiliklar
Javobgarlikdan voz kechish: XM Group korxonalari har biri faqat ijro xizmatlarini koʻrsatadi va onlayn savdo platformamizdan foydalanish huquqini beradi, bu odamga veb-saytda yoki veb-sayt orqali mavjud boʻlgan kontentni koʻrish va/yoki undan foydalanishga ruxsat beradi hamda uni oʻzgartirishga moʻljallanmagan va uni oʻzgartirmaydi yoki kengaytirmaydi. Bunday kirish va foydalanish huquqi doimo quyidagilarga boʻysunadi: (i) Shartlar va qoidalar; (ii) Risklar haqida ogohlantirish; va (iii) Javobgarlikni toʻliq rad etish. Shuning uchun bunday kontent umumiy maʼlumot sifatida taqdim etiladi. Xususan, shuni esda tutingki, bizning onlayn savdo platformamiz mazmuni moliyaviy bozorlarda biror bitimni amalga oshirishga oid maslahat yoki taklif emas. Har qanday moliyaviy bozorda savdo qilish sizning kapitalingiz uchun jiddiy risk darajasini oʻz ichiga oladi.
Onlayn savdo platformamizda chop etilgan barcha materiallar faqat taʼlim/axborot maqsadlari uchun moʻljallangan va unda moliyaviy, investitsiya soligʻi yoki savdo maslahatlari va tavsiyalar; yoki bizning savdo narxlarimizning qaydlari; yoki har qanday moliyaviy vositalar bilan bitim tuzish maslahati yoki taklifi; yoki sizga kerak boʻlmagan moliyaviy reklama aksiyalari hisoblanmaydi
Har qanday uchinchi tomon kontenti, shuningdek XM tomonidan tayyorlangan kontent, masalan: fikrlar, yangiliklar, tadqiqotlar, tahlillar, narxlar va boshqa maʼlumotlar yoki bu veb-saytda joylashgan uchinchi tomon saytlariga havolalar umumiy bozor sharhi sifatida "boricha" taqdim etiladi va investitsiya maslahatini tashkil etmaydi. Har qanday kontent investitsiya tadqiqoti sifatida talqin qilinsa, siz bunday kontentni investitsiya tadqiqotlarining mustaqilligini ragʻbatlantirish uchun moʻljallangan qonun talablariga muvofiq moʻljallanmagan va tayyorlanmaganligini eʼtiborga olishingiz va qabul qilishingiz kerak, shuning uchun unga tegishli qonunlar va qoidalarga muvofiq marketing kommunikatsiyasi sifatida qaraladi. Mustaqil boʻlmagan investitsiya tadqiqoti va yuqoridagi maʼlumotlarga oid risk haqida ogohlantirishimizni oʻqib chiqqaningizga va tushunganingizga ishonch hosil qiling, unga bu yerdan kirish mumkin.
