big three regional banks of the United States met or exceeded earnings expectations this Wednesday, July 19, as rising interest rates allowed them to charge more for loanswhile deposits stabilized, pushing up shares across the sector.
Investors have been eagerly awaiting the results of the second quarter of regional banks looking for reassurance that the turmoil that rocked the sector earlier this year has finally passed.
M&T said that net interest income (INI), which measures the difference between what banks earn on loans and what they pay on deposits, increased 27% to u$s1,810 million compared to the same quarter of the previous year, while Citizens stated that their Net interest income increased 5.5% to $1.59 billion. In US Bancorp (USB)the INI rose around 28%.
Due to the rates in the US, the actions of the banks take off
On Tuesday, big US banks claimed that rising interest rates had helped boost second-quarter earnings, leading to a rally in stocksbut a decline in consumer spending, slower loan growth and higher deposit costs could cloud the outlook for the sector.
In this sense, from USB they warned this Wednesday that now They expect the INI for the whole year to be between US$17,500 and US$18,000 millionbelow the average of analyst estimates of $18.1 billion, according to data from refinitiv.
The actions of M&T rise 2.6% and those of Citizens 6.2%while the US Bancorp gain 5.8%. He KBW index of regional banks advances 2.7% and the S&P regional banks index adds 3%in line with the market in general.
Zions Bancorp reports its results later on Wednesday, while Trust Financial, keycorp and Fifth Third Bancorp They do it on Thursday.
Despite the banking crisis, entities rebounded
The results follow a tumultuous first quarter in which Silicon Valley Bank and two other lenders went under after a massive withdrawal of depositsprompting panic-stricken consumers to withdraw deposits from small banks and place them with larger banks Wall Street, which has forced some banks to offer consumers higher returns.
“In the case of the regional banks, it was thought that they were going to be quite weak, and they have not been so far”it states Dennis Dickmarket structure analyst Triple D Trading.
“After everything we saw happen in the regional banking crisis a couple of months ago, there was concern about a lot of withdrawals, but I would say it’s been better than expected.”
deposits of M&T rose to $162.1 billion from $159.1 billion at the end of the first quarter, but fell around 4.9% yoy.
U.S. Bancorp He said that the total average deposits stood at US$497.270 million, 2.6% less in sequential terms, but 9% more in year-on-year terms.
In citizens, deposits fell less than 1% sequentiallyau$s173.200 million.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
