Bank earnings season kicks off Friday with JPM, WFC, BK, and BLK reporting in the morning. Here is what to expect, courtesy of Goldman Financials specialist Alex Mitola.
What’s Most in Focus for Bank EPS?
- NII: Outlooks & Commentary post fed cut (focus on 2025) and with forward curve pricing in rapid rate cuts
- Deposit Beta: What are expectations for deposit betas on the way down? Lagged deposit betas? When will banks reach ‘breakeven’ beta? Who will be winners/losers?
- Loan Growth: Expected to remain tepid; what are latest thoughts around acceleration?
- Deposit & Cash Balances: What are deposit growth expectations into 2025?; when will cash sorting and DDA mix shift stabilize and inflect?
- Wealth Deposit Sweeps: Any further repricing risk? Any color on regulatory involvement?
- Capital Markets: Lower rates a positive; What will pace of IBanking growth be?
- Credit: Normalizing; Watch for lumpy commercial losses; Cracks in consumer credit? Continue to watch office CRE; will higher unemployment drive builds?
- Expenses: Operating leverage in 2025? Return to ‘more normal’ 2-3% expense growth?
- Capital Return: Timing/Magnitude of capital return uncertain given lack of finalization on capital rules + higher G-SIB buffers and SCBs; Possibility for Bank M&A in 2025?
- Regulation: Latest B3E expectations; Wealth Sweep Deposit; Late Fee Rule litigation continues/mitigation updates; Potential Election Impacts
