In the United States, two major regional banks have released muted forecasts for their net interest income in the first quarter of the current year amid uncertainty about the extent to which low interest rates will revive demand for loans.
In the United States, two major regional banks have released muted forecasts for their net interest income in the first quarter of the current year amid uncertainty about the extent to which low interest rates will revive demand for loans.
PNC Financial Services Group Inc. projects that its net interest income will fall by 2-3% on a sequential basis in the first three months of 2025. It is worth noting that this financial institution, as part of its forecasting, is guided by the expectation that loan growth will slow down.
U.S. Bancorp expects its net interest income to be relatively stable in the first quarter of 2025.
It is worth noting that recently, among regional banks in the United States, there has been a kind of scaling of pessimistic perception in the context of the vision of the future and the prospects that are most likely to be in this space of the coming time, which has not yet become a reality. The relevant sentiments among financial institutions in the mentioned category are due to circumstances such as sluggish loan growth and increased competition for deposits amid lower borrowing costs. It is worth clarifying that this vision mainly concerns the assessment of the most likely prospects related to the expected situation in the first quarter of 2025.
Concerning forecasts for the entire current year, regional banks are showing a more optimistic attitude. PNC, based in Pittsburgh, expects its total revenue for 2025 to show growth. The bank forecasts an increase of about 6% in this indicator.
U.S. Bancorp, based in Minneapolis, expects its total net revenue to grow by 3-5% in 2025.
Last Thursday, January 16, the securities of the mentioned financial institutions belonging to the category of regional banks demonstrated a downward dynamic in early trading in New York. The value of PNC shares decreased by about 3.7%. U.S. Bancorp securities fell by roughly 2.8%.
Andy Cecere, chief executive officer at U.S. Bancorp, said that this lender is well positioned to deliver industry-leading returns on tangible common equity and remain confident in its strategy for future growth and its ability to deliver meaningful positive operating leverage.
The net interest income of the mentioned financial institution for the fourth quarter of 2024 was recorded at the $4.18 billion mark. This indicator slightly exceeded the preliminary expectations of analysts. The net interest income of PNC for the last quarter of 2024 was $3.52 billion. This indicator also turned out to be higher than analysts’ forecasts.
PNC, which is the sixth largest bank in the United States in terms of total assets, at the official statement level declares its aspiration for growth and intention to open new branches and renovate existing locations. William Demchak, chief executive officer of the financial institution, believes that this lender is a natural player in the consolidation of the industry, as banks benefit from the economies of scale.
Recent years have been a difficult period for the regional segment of the United States banking sector. The future as a space of prospects for financial institutions of the relevant category continues to contain significant uncertainty.
As we have reported earlier, Bank of America Reports Earnings.
