Whalen Global Advisors Says US Banks Likely to Improve in Third Quarter

Main Street Lenders Rebound as Wall Street Banks Struggle

Whalen Global Advisors LLC

Whalen Global Advisors LLC (WGA) has published the latest edition of The IRA Bank Book, the quarterly outlook for the US banking industry. The highlights of the new report include:

  • Income for the U.S. banking industry surged in Q2 2022. WGA projects that industry income for U.S. banks will continue to improve faster than expected by most analysts.
  • Loan growth for U.S. banks is strong and likely to accelerate in 1H 2022, even as the FOMC ends its asset purchases and allows excess reserves in the system to decline.
  • Credit losses for U.S. banks remain very depressed due to QE. The process of normalization of credit and funding costs represents an opportunity for better-managed lenders able to reprice earning assets to take advantage of low deposit rates.
  • Rising interest rates and lending volumes have caused the principal balance of home equity lines of credit (HELOCs) owned by banks to rise for the first time since 2008.

"The same people who were telling clients to buy large cap bank stocks like JPMorgan (JPM) at 2x book value a year ago are now running away from bank stocks just as the fundamentals are starting to improve," notes WGA Chairman Christopher Whalen. "We expect to see reasonably strong earnings for lender in Q3 2022 as loan yields slowly rise, but the market-facing firms are likely to deliver weak results."

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. Media wishing to receive a courtesy copy of the report please email us.

About Whalen Global Advisors LLC

Whalen Global Advisors LLC (WGA) is a New York-based consulting, risk analytics and publishing company that focuses on financial institutions and global markets. WGA publishes The Institutional Risk Analyst (ISSN 2692-1812), including commentary on the capital markets, industry reports and company profiles. For additional information, please contact us at: info@rcwhalen.com

Source: Whalen Global Advisors


Categories: Governmental Banking, Commercial Banking, Banking, Finance, Insurance, Consumer Banking, Banking, Finance, Insurance

Tags: Banking, Economy, Wall Street

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About Whalen Global Advisors LLC

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Whalen Global Advisors LLC is a New York-based consulting firm that focuses on the the banking, mortgage finance and fintech sectors.

Whalen Global Advisors LLC
P.O. Box 8903
Scarborough, NY 10510-8903
United States