Pain to ease for US banks
WALL Street banks are expected to have enjoyed an improvement in the second quarter when they report half year results this week.
Consensus analysts’ forecasts for the top US banks suggest that markets improved during the quarter, leading to a surge in investment banking revenues.
Morgan Stanley analysts forecast in a recent research note that Bank of America and JPMorgan Chase would see investment banking revenues rise by between 35 and 39 per cent.
The bank also predicted a slowdown in the rate of acceleration of non-performing loans across the sector, indicating smaller credit losses in the medium-term future.
Goldman Sachs kicks off the Wall Street reporting season tomorrow, after enjoying a 3.4 per cent rise last week, on the back of a note from Bank of America Merrill Lynch, which upgraded Goldman to “Buy” from “Neutral”.
A consensus forecast estimates that the bank will book a profit of $3.39 (£2.09) per share, following on from the first quarter result of $3.42.
PNC is likely to be the other star performer, with analysts predicting second quarter earnings to hit $1.03 per share, up from $0.55 in the first quarter.
Stricken titan Citigroup is predicted to continue to be loss-making, with analysts predicting a loss of $0.18 per share and a full year loss of up to $0.40 a share. However, the result would be a remarkable turnaround from last year’s full year loss of $5.59 per share.