Banks in brackets for more pain
The result of last season in the mirror for most of the nation ’s banks, investors can breathe a little easier.
At least for now. Given that the final figures still in the gutter, finance, as a group, a rate slightly better than most analysts expect.
indeed, more than half of the financial services companies in the S & P 500, which contain everything that regional banks for investment, managing to beat the expectations of profits in second quarter , According to Thomson Reuters.
of course, several banks only small losses than expected. Overall, the financial sector is expected to report total profits of nearly $ 8.9 billion during the quarter increased 85% over the result of $ 61.3 billion a year earlier.
Fears of cooling credit
this season under performance, requires banks were combined in the deficit of investor fears of credit and capital. analysts were betting that the banks would again on its beef reserves the right to risk prevention such as the housing market continues to deteriorate and the U.S. economy will continue to Sputter.
banks at the same time that nonperforming assets and net cost-offs, or loans from banks don ‘t believe that collectors continue.
Only one day later, the best leaders of Washington Mutual, the nation ’s largest economy, didn ‘ t exclude other risks Provident as a whole, but the company said Provisioning he expects the peak hours at some point this year. The company added that it was to see the first signs of a stabilization of some of their countries of origin, including Subprime credit portfolios.
Floating in the economy
While some presidents bank was far this quarter patting on the back. If ever, better than the terrible figures simply bought a little more time with frustrated shareholders.
But the worst may not include more than for large banks only. Mark Freeman, Portfolio Manager at West Holdings Group in Dallas, said that the financial situation of companies are on the mercy of the economy.
If home values Lot and U.S. consumers are still stretched by rising unemployment, in addition to higher food and energy costs, banks also in bulk on their loan loss provisions in distress.
source:cnn.com
