Q3 Outlook for U.S. Commercial Banks As Rates Remain Higher For Longer

The liquidity crunch that emerged in March put a far greater premium on deposits and forced many banks to rely on higher-cost funding sources such as certificates of deposits (CDs) and borrowings from the Federal Home Loan Banks. Those liquidity pressures have persisted along with further rate hikes by the Federal Reserve, suggesting that banks’ net interest margins likely peaked in the first quarter. Banks are responding to those headwinds by preserving liquidity, slowing loan growth and building reserves ahead of any potential downturn in the economy. Taken together, the greater caution will take bite out of banks’ earnings in 2023 and could change strategic approaches later in the year.

During this webinar, Nathan Stovall, Director of FIG Research, will present his outlook for the banking industry in the second half of 2023 and discuss highlights from banks’ second-quarter earnings season. Sr. Analyst David Hayes will also review the results of S&P Global Market Intelligence's recent quarterly survey of banking clients, which lend further insight into the current operating environment and outlook for U.S. Commercial Banks.