As Falling Rates Bite Into Revenue, U.S. Banks Turn to Cost Cuts
- Projected revenue at top six banks has declined by $13 billion
- Mortgages, consumer seen as bright spots as banks post results
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Higher interest rates were supposed to be a godsend for U.S. bank earnings this year. But with borrowing costs falling instead of rising, CEOs will have to lean on cost cutting to reach their goals.
When the biggest lenders report third-quarter results next week, investors will be gauging their success in grappling with ever-shrinking projections for net interest income. Estimates for revenue at the six biggest banks have plunged $13 billion since the start of 2019, with muted capital markets and signs the economy is slowing adding to the profit pressure.