A review of first quarter earnings results for U.S. banks finds that they are enjoying some unexpected success at boosting revenues, but that challenges remain.
A new report from Fitch Ratings says that strong mortgage banking results, driven by refinancings, and a rebound in capital markets business, drove “surprisingly solid revenue growth” for the large U.S. banks in the first quarter.
However, it also notes that, while revenues were generally higher for most banks, spread income was flat or down, given the prolonged low interest rate environment. The report says that the uneven economic recovery produced modest organic loan growth.
Exposure to home equity loans remains of Fitch’s top concern for U.S. banks, particularly for the largest institutions where most of these loans are concentrated, it adds.