The Outlook from Bank CEOs
April 28, 2014 7:30 AM
Earnings season is a great time to gather clues from bank chiefs on what they see for the economy in the months ahead. Some, like Dick Evans of Cullen/Frost Bankers in Texas, are extremely bullish. Others, like BB&T's Kelly King, fret about revenue growth.
Pictured: John Stumpf (Wells Fargo), Richard Davis (U.S. Bancorp), Beth Mooney (KeyCorp). (Images: Bloomberg News)
Too Many Banks?
Robert Wilmers of M&T Bank (MTB) remains optimistic about the Buffalo, N.Y., company's prospects, but issued this warning at its annual meeting last week : "Too many banks are competing for too few loans in an economy that continues to be characterized by slow and uneven growth."
Loosening Their Belts
Wells Fargo (WFC) delivered record profits in the first quarter despite the mortgage slowdown, and CEO John Stumpf expects growth to continue as consumers and business start spending again. "Households have reduced their leverage to the lowest level since 2001," he said. "Businesses are well-positioned to hire and invest with ample amounts of cash."
(Image: Bloomberg News)
Where's the Revenue?
(Image: Bloomberg News)
Go West
U.S. Bancorp's (USB) Richard Davis was bullish about his bank's prospects in the Western U.S. "Commercial real estate [is] strong on both coasts [and in] Texas, particularly in new construction.
The most active cities are Seattle, San Francisco, [Los Angeles] and Orange County, so that stays pretty much West Coast-focused."
(Image: Bloomberg News)
Cutting Costs
Economic uncertainty has prevented SunTrust Banks (STI) CEO William Rogers from setting a date for the Atlanta company to reach its goal of a sub-60% efficiency ratio . "We have got the right plans in place
but the length of time of when we get there is going to be economic dependent and somewhat interest rate dependent," he said.
(Image: Bloomberg News)
Close to Home
Huntington Bancshares (HBAN) is getting a boost from its base in the relatively stable Midwest . "Almost all of our lending is in our footprint," said CEO Stephen Steinour. "That's a reflection of the economy here in the Midwest. It is strengthening."
(Image: Bloomberg News)
Little Margin for Error
KeyCorp's (KEY) Beth Mooney said that the bank's focus on lending categories with lower yields , like commercial banking and investment banking, has made cost-cutting more difficult. "This revenue environment of low interest rates is clearly pressuring the efficiency and productivity of our industry," she said.
(Image: Bloomberg News)
Lone Star State of Mind
(Image: Bloomberg News)
