PR Newswire
NEW YORK, May 24, 2023
NEW YORK, May 24, 2023 /PRNewswire/ -- U.S. community banks and their larger counterparts will see earnings drop by double-digits in 2023, according to S&P Global Market Intelligence's annual U.S. Bank and U.S. Community Bank Market Reports. The two new reports conclude that U.S. bank earnings will fall markedly this year as liquidity pressures weigh on net interest margins, while credit costs rise.
Published by S&P Global Market Intelligence's financial institutions research group, the reports find that U.S. banks will respond to the liquidity crunch by building reserves for loan losses, slowing loan growth and building cash on their balance sheets. Those actions in conjunction with higher funding costs will put pressure on margins and earnings. As margins come under pressure, banks will continue to build reserves for loan losses in the face of an increasingly uncertain economic environment.
"Significant tightening from the Federal Reserve since March 2022 and customers moving cash out of banks into higher-yielding alternatives have put pressure on liquidity across the banking industry," said Nathan Stovall, director of financial institutions research at S&P Global Market Intelligence. "More recently, liquidity pressures grew in the wake of the second, third and fourth-largest bank failures in U.S. history, sparking concerns about funding. The increased funding costs will serve as a headwind to banks' net interest margins, but the challenge appears to be an earnings issue rather than a threat to safety and soundness of the banking system."
Key findings from the US Bank Market Report:
Key findings from the US Community Bank Market Report:
To request a copy of the 2023 U.S. Community Bank Market Report and/or the 2023 U.S. Bank Market Report, please contact [email protected].
S&P Global Market Intelligence's opinions, quotes, and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendation to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security.
About S&P Global Market Intelligence
At S&P Global Market Intelligence, we understand the importance of accurate, deep and insightful information. Our team of experts delivers unrivaled insights and leading data and technology solutions, partnering with customers to expand their perspective, operate with confidence, and make decisions with conviction.
S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI). S&P Global is the world's foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world's leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information, visit www.spglobal.com/marketintelligence.
Media Contact
Katherine Smith
S&P Global Market Intelligence
+1 781-301-9311
[email protected]
View original content to download multimedia:https://www.prnewswire.com/news-releases/sp-global-market-intelligence-expects-us-community-bank-earnings-to-fall-more-than-22-percent-this-year-301832415.html
SOURCE S&P Global Market Intelligence
We use cookies to tailor your experience, measure site performance and present relevant offers and advertisements. By clicking ‘Accept’ or any content on this site, you agree that cookies can be placed on your browser. You can view our privacy policy to learn more.
If you would like to get more data, alerts and access to Real Vision videos, join us as an Insider Tracking Advantage Ultra member