Latest news with #interest income
Yahoo
4 days ago
- Business
- Yahoo
Huntington Bancshares lifts 2025 interest income forecast as loan growth shines
(Reuters) -Regional lender Huntington Bancshares on Friday raised its annual interest income forecast, betting on robust loan growth and lower deposit costs. The Columbus, Ohio-based Huntington has delivered strong growth in its core businesses and expanded to North and South Carolinas and Texas in recent years, despite high interest rates squeezing loan demand for regional banks. Rate cuts by the U.S. Federal Reserve last year have also allowed banks to reduce deposit costs. The bank now expects net interest income (NII) - the difference between what it earns on loans and pays out on deposits - to grow between 8% and 9% in 2025, compared with its prior forecast of 5% and 7% rise. Annual loan growth is expected between 6% and 8%, higher than its prior forecast of 5% to 7% rise. NII jumped 12% to $1.47 billion in the second quarter, putting the bank on track for a record full-year interest income. Average total loans and leases grew $9.8 billion from the year-ago quarter. Huntington's profit per share rose to 34 cents in the quarter ending June 30, from 30 cents a year earlier. On Monday, Huntington struck a $1.9 billion deal for rival Veritex, furthering its Texas push. BOND PORTFOLIO REJIG Months after a similar move, Huntington rejigged a portion of its securities portfolio to boost profits, as banks increasingly dump lower-yielding securities. Huntington sold $900 million of corporate bonds in the quarter and reinvested proceeds into higher-yielding securities, resulting in a pre-tax loss of $58 million. The rejig is expected to boost revenue and interest margin in the second half of the year and into 2026, with Huntington picking up about 340 basis points of yield on the trade. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Fifth Third Bancorp's quarterly profit rises on higher interest income
(Reuters) -Fifth Third Bancorp reported a rise in second-quarter profit on Thursday, as lower deposit costs boosted the regional bank's interest income, cushioning a larger buffer for loan losses. An interest rate cutting cycle by the U.S. Federal Reserve in the second half of 2024 has prompted efforts by banks to reduce deposit costs across their portfolios. The company's net interest income (NII) — the difference between what banks pay customers on deposits and what it earns as interest on loans — for the quarter rose 7.8% from a year ago to $1.5 billion. The rise in NII reflected an improving asset mix and repricing of certain fixed-rate assets, with interest expense down 20% compared with the year-ago period. After a rocky start to the quarter when U.S. President Donald Trump's tariffs scuttled dealmaking, executive sentiment has rebounded on hopes for trade deals and potential rate cuts by the Fed. But regional lenders such as Fifth Third depend largely on loans to small businesses and consumers, who are particularly vulnerable to an economic slowdown. The Cincinnati, Ohio-based bank's provision for credit losses jumped to $173 million in the quarter from $97 million a year earlier, as it set aside more funds to account for a potential increase in loan defaults. The lender also benefited from higher fees, with total non-interest income rising 8% to $750 million in the quarter, boosted by a seasonal equity fund return. Net income available to common shareholders rose to $591 million, or 88 cents per share, in the three months ended June 30. It had reported $561 million, or 81 cents per share, a year earlier. Shares of Fifth Third have risen 1.8% YTD, as of last close, compared with a 10.7% gain in the KBW Bank index.
Reuters
15-07-2025
- Business
- Reuters
Wells Fargo profit rises on lower bad loan provisions
July 15 (Reuters) - Wells Fargo's (WFC.N), opens new tab profit rose in the second quarter as it set aside less money to shield for potential bad loans. Shares of the San Francisco, California-based bank fell 2.7% in premarket trading as the lender cut its expectation for annual interest income. Wells Fargo expects its interest income to be roughly in line with 2024 level of $47.7 billion, it said. In April, the bank had forecast NII growth would be at the low end of the 1% to 3% range. Analysts and investors were skeptical about Wells Fargo's ability to meet its targets for interest income after a slow start to 2025. The bank had expected its net interest income (NII), or the difference between what it earns on loans and pays out on deposits, to be relatively stable in the first half of 2025, with more growth in the second half. Heading into the results, some analysts had expected the bank to cut its NII forecast as elevated interest rates weighed on demand from borrowers. Meanwhile, provision for credit losses fell to $1.01 billion in the quarter from $1.24 billion a year ago. Consumers and businesses have continued to repay loans, allaying concern that shifting U.S. trade policies would trigger a recession. Still, uncertainty around the economic outlook persists. Wells Fargo executives have previously said their efforts to tighten credit over the past couple of years should help the bank to weather a potential economic downturn. The fourth-largest U.S. lender's net income was $5.49 billion, or $1.60 a share, in the three months ended June 30, it said on Tuesday. That compares with $4.91 billion, or $1.33 a share, a year earlier. Last month, the U.S. Federal Reserve lifted Wells Fargo's seven-year-long $1.95 trillion asset cap, allowing the bank to pursue unimpeded growth. Wells Fargo has been focused on fixing its regulatory problems in recent years. While it labored under a $1.95 trillion cap asset cap, rivals expanded. With the asset cap lifted and regulatory issues largely in the rearview mirror, Wall Street analysts expect Wells Fargo to attract more investor interest as its profits grow. Scharf has said the bank will expand carefully. Wells Fargo is likely to beef up its wholesale businesses by adding market share in commercial banking, corporate and investment banking and trading. The bank has closed seven regulatory punishments, known as consent orders, this year and 13 since 2019. It still has one remaining consent order from 2018.
Yahoo
15-07-2025
- Business
- Yahoo
Wells Fargo profit rises on lower bad loan provisions
(Reuters) -Wells Fargo's profit rose in the second quarter as it set aside less money to shield for potential bad loans. Shares of the San Francisco, California-based bank fell 2.7% in premarket trading as the lender cut its expectation for annual interest income. Wells Fargo expects its interest income to be roughly in line with 2024 level of $47.7 billion, it said. In April, the bank had forecast NII growth would be at the low end of the 1% to 3% range. Analysts and investors were skeptical about Wells Fargo's ability to meet its targets for interest income after a slow start to 2025. The bank had expected its net interest income (NII), or the difference between what it earns on loans and pays out on deposits, to be relatively stable in the first half of 2025, with more growth in the second half. Heading into the results, some analysts had expected the bank to cut its NII forecast as elevated interest rates weighed on demand from borrowers. Meanwhile, provision for credit losses fell to $1.01 billion in the quarter from $1.24 billion a year ago. Consumers and businesses have continued to repay loans, allaying concern that shifting U.S. trade policies would trigger a recession. Still, uncertainty around the economic outlook persists. Wells Fargo executives have previously said their efforts to tighten credit over the past couple of years should help the bank to weather a potential economic downturn. The fourth-largest U.S. lender's net income was $5.49 billion, or $1.60 a share, in the three months ended June 30, it said on Tuesday. That compares with $4.91 billion, or $1.33 a share, a year earlier. DEFENSE TO OFFENSE Last month, the U.S. Federal Reserve lifted Wells Fargo's seven-year-long $1.95 trillion asset cap, allowing the bank to pursue unimpeded growth. Wells Fargo has been focused on fixing its regulatory problems in recent years. While it labored under a $1.95 trillion cap asset cap, rivals expanded. With the asset cap lifted and regulatory issues largely in the rearview mirror, Wall Street analysts expect Wells Fargo to attract more investor interest as its profits grow. Scharf has said the bank will expand carefully. Wells Fargo is likely to beef up its wholesale businesses by adding market share in commercial banking, corporate and investment banking and trading. The bank has closed seven regulatory punishments, known as consent orders, this year and 13 since 2019. It still has one remaining consent order from 2018. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
15-07-2025
- Business
- Yahoo
BNY's profit rises on higher interest income, fee revenue growth
(Reuters) -BNY's profit jumped in the second quarter, the Wall Street bank reported on Tuesday, driven by higher interest income and fee revenue growth, as client portfolios swelled due to a recovery in the equity market. A late-quarter rally driven by hopes of trade deals and possible rate cuts lifted major U.S. indexes and improved sentiment. Shifting U.S. tariff policies and mounting geopolitical tensions had whipsawed the markets earlier in the quarter. BNY's assets under custody and administration rose 13% in the quarter ended June 30 to $55.8 trillion from a year earlier. The world's largest custodian bank said the increase reflected higher market values, client inflows and the favorable impact of the weaker U.S. dollar. Its total revenue climbed 9% and exceeded $5 billion for the first time in a quarter. Net interest income (NII) - the spread between earnings from assets and costs on liabilities - also rose 17%. Analysts on average had forecast growth of 11.8%, according to estimates compiled by LSEG. Profit applicable to BNY shareholders came in at $1.39 billion, or $1.93 per share, compared with $1.14 billion, or $1.52 per share, a year earlier. Assets under management rose 3% over the same period. SECURITIES SERVICES SHINES The bank's asset servicing business, which handles the safekeeping and settlement of trades, posted a 7% rise in revenue. Meanwhile, its issuer services segment, which supports clients issuing securities, reported a 17% increase. Total fee revenue rose 7% to $3.64 billion, compared with the year-ago quarter. "BNY's ongoing transformation has significant momentum," CEO Robin Vince said in a statement. "Only one year after the launch of our new commercial model last summer, we delivered two consecutive quarters of record sales in the first half of the year." Custodian banks play a critical role in global markets by safeguarding trillions of dollars in client assets, handling the settlement of trades, and ensuring a smooth transfer of securities and cash between financial institutions. Last month, the Wall Street Journal reported that BNY had approached smaller rival Northern Trust about a potential merger. Chicago-based Northern Trust later said it remained fully committed to staying independent. Dealmaking in the sector is expected to pick up in the second half of the year. But analysts have said a tie-up between BNY and Northern Trust is unlikely, citing doubts over Northern Trust's interest in selling and the regulatory hurdles in a merger of two globally significant banks. They added that BNY could instead pursue a different target.
