NEW YORK- Big US banks are expected to show a sharp decline in first quarter earnings from a year ago, when they benefited from exceptionally strong dealmaking and trading, and funds set aside for loan losses being released.
Net income for the six biggest US banks will be down about 35 percent from a year earlier, according to analyst estimates from Refinitiv. Investment banking revenues stalled after the Russian invasion of Ukraine in late February.
The quarter will be challenging for the biggest banks, according to analyst Christopher McGratty of Keefe, Bruyette & Woods. Estimated revenue declines of 36 percent in investment banking and 18 percent in trading are the biggest headwind, he said.
“Last year was massive for capital markets at the banks so comparisons are hard,” McGratty said.
The quarter could be seen as short-term pain with the promise of long-term gain, analyst Jason Goldberg of Barclays wrote in a report. An example came on March 31 when PNC Financial Services Group lowered its first-quarter revenue forecast but increased its full-year expectations, he noted.
