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First-quarter results from U.S. Bancorp and PNC Financial Services Group shows banks have little choice but to wait until the Fed raises interest rates. They have cut expenses almost as far as they can go, and fee income is limited in how much it can offset narrower spread income.
April 15 -
The San Francisco bank has produced enough growth in mortgages, C&I and other areas and made other moves to offset low rates. It is a hopeful example for mortgage-heavy banks and other lenders battling tight margins.
April 14 -
JPMorgan Chase reported strong loan growth and higher utilization in its commercial banking unit, which serves midsize businesses. It could set the stage for others to report similar results. Still, low interest rates are muffling the benefits.
April 14
SunTrust Banks in Atlanta reported higher first-quarter profit as stronger fee income and lower expenses helped offset a drop in income from lending.
The $190 billion-asset company said net income rose 4.6% to $411 million or 78 cents per share, from a year earlier. However, total revenue fell 2%, to $1.99 billion.
Net interest income fell 5% to $1.2 billion. The net interest margin shrank 36 basis points to 2.83%. Total loans rose 2%, to $132 billion.
SunTrust attributed the decrease in net interest income to lower commercial loan-swap income, higher amortization expense for mortgage-backed securities premiums and lower loan yields.
Fee income rose 3% to $817 million on higher income from mortgage banking and capital-markets activities.
Noninterest expense fell 6% to $1.3 billion. The company's efficiency ratio improved 260 basis points to 64.23%.
