Bank Stock Roundup: Q4 Earnings Commences, BofA, JPMorgan & Citi Top Estimates
Zacks Investment Research | Jan 16, 2020 08:51PM ET
Most banks that reported fourth-quarter 2019 results this week managed to record bottom-line growth on higher fee income, driven by fixed income trading revenues resulting from strong client activities. Further, remarkable investment banking performance, aided by strong underwriting business and steady consumer banking, was on the upside.
In addition, mortgage banking revenues rebounded on lower rates mainly owing to rise in mortgage origination volume. In addition, escalation in loans and deposits acted as tailwinds. However, advisory business was on the downside.
Also, net interest margin was disappointing, adversely impacted by the Fed’s rate cuts. Along with low rates, flatter yield curve, deposit pricing and shift in funding mix kept net interest income low. Additionally, an overall rise in non-interest expenses, due to high spending on technology and personnel, and other market development initiatives, was an undermining factor. This apart, provisions soared.
Nevertheless, banks continued with their restructuring and streamlining initiatives. Moreover, legal expenses remained manageable.
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