Low Rates, Usually Good for Banks, May Hurt This Time
The Financial Times is reporting that, despite good performance this quarter by Citigroup and Bank of America, low interest rates may hurt the commercial banking business in coming quarters. Consumer banking has been driving a large part of the recovery in financial services. This could take the verve out of the bulls, since financial services is one of the bright spots in the economy right now. From the FT (which is subscription protected):
Posted by Mitch Ratcliffe at July 14, 2003 08:43 AM | TrackBack
"It wouldn't surprise me to see companies start talking about some pressure on the net interest margins," said Henry McVey, who follows large banks for Morgan Stanley. In other areas, Mr McVey said: "We think trading results will be robust again this quarter and we should continue to see some improvement in commercial credit [quality], particularly at names such as Citigroup and JP Morgan Chase."