U.S. banks are finding their footing and as earnings start to roll in from the big names there are some trends emerging. Bobbi Rebell reports.
U.S. banks are finding their footing and as earnings start to roll in from the big names there are some trends emerging. For one thing, credit conditions are looking better. Reuters BreakingViews Antony Currie: SOUNDBITE: ANTONY CURRIE, COLUMNIST, REUTERS BREAKINGVIEWS (ENGLISH) SAYING: "People and businesses are paying their loans back wonderfully on time. Everything is looking great. Now it may be that the banks are being a bit more conservative." The recent uptick of market volatility has helped trading revenues. For example, JP Morgan saw fixed income and currency trading revenue rise. And cost cutting helps. Citi is getting out of consumer banking in 11 markets including Egypt and Japan. The mortgage business is steadying - that helped over at Wells Fargo - but it's still not great. FBR's Paul Miller: SOUNDBITE: PAUL MILLER, BANK ANALYST, FBR (ENGLISH) SAYING: "The purchase market today is about $600 billion. It's the same size it was 25 years ago. So, this is an issue overall issue with the mortgage market. They have to get out of this. We need a more- stronger purchase market. I think not just for the banks and mortgage banks to do well, but the overall economy to do well, because housing is a very big part of the economy" And lower yields on treasuries are also making it tougher for banks to make money. SOUNDBITE: PAUL MILLER, BANK ANALYST, FBR (ENGLISH) SAYING: "I think if the 10-year remains weak and we continue to see a flattening yield curve you are going to struggle getting earnings, your cost of capital. I think that is the biggest concern for any of these companies. " Miller added that the increased regulations put in place after the financial crisis have raised costs and continue to hurt the sectors' profitability.