Big Banks - NTRS, FITB, BKU - Q1 Earnings To Watch On Apr 25
Zacks Investment Research | Apr 23, 2017 09:34PM ET
With two consecutive interest rate hikes by the Fed, big banks, which reported first-quarter 2017 results this earnings season, mostly managed to beat estimates with their top-line strength and lower provisions. This also lifted market sentiments of the banking sector.
Banks’ trading income is expected to improve on the back of strength in fixed income, and currencies and equity trading. However, a slowdown in loan growth during the quarter will have a marginal adverse impact on interest income.
Expense-control initiatives would likely continue to support the bottom line, though continued investments in digitization might lead to modest rise in expenses.
Therefore, per our Earnings ESP of 0.00%, the chances of Fifth Third beating the Zacks Consensus Estimate are low. The Zacks Consensus Estimate for the quarter reflected optimism, with 2.7% upward revision over the last seven days.
You can uncover the best stocks to buy or sell before they’re reported with our Fifth Third Bancorp Quote
Northern Trust Corporation (NASDAQ:NTRS) : The company derives significant part of its revenues from trust, investment and other servicing fees. These fees are highly dependent on the market value of clients’ assets under custody, which, in turn, are directly linked to the performance of equity markets. Notably, Northern Trust’s calculation of these fees considers a lag effect, i.e., the computations are based on prior-quarter end valuations. Since the performance of equity markets were relatively decent in the fourth quarter, the company should be able to record growth in custody, servicing and management fees.
Further, the company’s revenues should get a lift from higher foreign exchange trading revenues due to increase in volatility in the first quarter and volumes on a sequential basis. However, despite some cost-saving initiatives, Northern Trust’s continued investments in new business activities, and higher regulatory and compliance costs may lead to a slight rise in expenses. (Read more: What's in Store for Northern Trust in Q1 Earnings? )
Over the last 30 days, the Zacks Consensus Estimate for the company remained unchanged at $1.07, for the upcoming release. In addition, the company has a Zacks Rank #2 (Buy), with an Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter. You can see Zacks Investment Research
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