NEW YORK, July 9 (Reuters) – Some of the largest U.S. banks will probably report weaker profits for the second quarter as they earn less from interest payments and set aside more money to cover deteriorating loans, analysts said.
As banks kick off earnings season on Friday, analysts predict provisions could rise for potential losses on commercial and industrial (C&I) loans, as well as those on commercial real estate.
“There is a credit cycle during every economic expansion,” said Betsy Graseck, a banking analyst at Morgan Stanley. “We’re conservatively baking in normalization of the credit cycle,” she said, referring to typical loss levels on bad loans across consumer and commercial loans.
Source: REUTER
