The large U.S. banks enjoyed stronger earnings and showed signs of improving margins in the second quarter compared with the corresponding quarter a year ago, Fitch Ratings Inc. reports.

Overall, the U.S. banks enjoyed strong fee-related income and benign credit costs, the New York-based credit-rating agency reports. The U.S. banks also saw strong income from mortgage banking, wealth management and investment banking — particularly loan syndication fees for the large regionals.

Moreover, Fitch reports that “the industry showed some glimmers of improving net interest margins (NIM),” with half of the 12 large banks enjoying some margin expansion. “It is unclear whether this marks an inflection point for these banks, but it does reverse a multi-quarter trend of NIM compression due to the low interest-rate environment.”

That said, several big Wall Street firms, including Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley all reported lower capital market revenue following the seasonally stronger first quarter, Fitch reports: “Much of the sequential decline for all five banks was due to much lower [fixed-income, currencies and commodities] revenue, which fell [by] 30% in aggregate on a linked-quarter basis.”

In addition, Fitch reports that 11 of the 16 banks still reported higher expenses. This is despite the fact that “controlling expenses remains a key strategic priority for the banking industry.”

As for the impact of falling oil prices, Fitch reports that although this “has yet to result in material loan losses for the large banks, most of the banks reported increases in energy-related problem assets.” As well, Fitch expects that “there will be further deterioration in energy-related problem assets, leading to higher provisioning” in the second half.