WGA Releases Q2 2024 Bank Outlook

Credit and Market Risk Menace Banks


Whalen Global Advisors LLC (WGA) has published the latest edition of The IRA Bank Book for Q2 2024. The quarterly outlook for the US banking industry features more than 30 Pages of charts and commentary about the financial condition of the sector. The highlights of the new report include:

  • A discussion of the composition of industry revenue and earnings, and the outlook for Q2 2024. Net interest margin fell yet again in Q1 2024, the report notes, but a strong rebound in fee income pushed overall results higher in Q1 vs Q4 2023.
  • New charts showing the different components of commercial real estate (CRE) loans and related data series including delinquency, net loss and loss-given-default. The report notes that loss severities in multifamily loans are leading the other sectors higher. Loss rates on all CRE loan categories are above levels of a decade ago and rising.
  • The report also highlights the huge amount of duration risk that remains hidden on the books of US banks because of the industry trend since 2008 to retain securities in “held to maturity” instead of available for sale.

“In 2008, most bank securities were AFS and marked to fair-value daily,” notes WGA Chairman Christopher Whalen. “Today, most bank securities are booked unhedged in held- to-maturity (aka ‘hide the duration’). The unrealized losses on COVID era securities remain a huge problem for banks large and small, especially if long-term interest rates rise back to Q3 2023 levels or above. If interest rates rise from current levels, then bank solvency again becomes an issue and may cause increased market volatility.”

Copies of the WGA report are available to subscribers to the Premium Service of The Institutional Risk Analyst. Stand alone copies of the report are also available for purchase in our online store. Media wishing to receive a courtesy copy of the report please email us: info@rcwhalen.com

About Whalen Global Advisors LLC

Whalen Global Advisors LLC is a New York-based consulting, publishing and financial analytics firm. We publish The Institutional Risk Analyst newsletter (ISSN 2692-1812), The IRA Bank Book (ISBN 978-0-692-09756-4) industry quarterly review, and the WGA Bank Top Indices. For more information, please contact us: info@rcwhalen.com

Source: WGA LLC

About Whalen Global Advisors LLC

Whalen Global Advisors LLC is a New York-based consulting and analytics firm that focuses on the the banking, mortgage finance and fintech sectors. WGA publishes a number of industry reports as well as bank equity indices.

Whalen Global Advisors LLC
P.O. Box 8903
Scarborough, NY


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