Bank Stock Roundup: Positive Stress Test Results, Brexit Makes Headlines; BofA In Focus
Zacks Investment Research | Jun 24, 2016 12:10AM ET
Over the last five trading days, the major banks showed a bullish trend. Investors’ confidence received a boost with the banks clearing the annual regulatory stress test successfully. The results reflect banks’ capability of withstanding economic downturn and negative U.S. interest rates with a high level of capital.
On the other side, the extent of the negative impact of U.K.’s exit from the European Union (EU) on banks is difficult to predict. It is anticipated that major banks having exposure to U.K. including JPMorgan Chase & Co. (NYSE:JPM) will experience high costs and lower profits. Moreover, employees of the banks will be affected with job cuts taking place. Further, the ongoing global economic uncertainty will affect business activities all the more.
The global impact of Brexit will depend upon the procedures and negotiations with the EU over the coming months. The effect on trading activities and regulations risks for the banks will unfold gradually.
Meanwhile, there is a growing trend among large banks to move to an electronic trading platform to improve revenues with Bank of America Corporation (NYSE:BAC) (NYSE:C) leading the way. Moreover, banks are striving to reap profits through restructuring and putting an end to legacy legal issues.
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