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US Banks To Benefit From 'Higher For Longer' Interest Rates: Goldman Sachs Sees 'Modestly Attractive Entry Point' For Investors
The emerging scenario of sustained high interest rates could boost the profitability of U.S. banks.
That’s according to Goldman Sachs analyst Richard Ramsden who, in a Monday note, expressed cautious optimism for the second-quarter earnings season.
Among the first to report on July 12 are JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Citigroup Inc. (NYSE:C), and Bank Of New York Mellon Corp. (NYSE:BK). Goldman Sachs Inc. (NYSE:GS) and Bank of America Corp. (NYSE:BAC) will follow with their reports on July 15 and 16, respectively.
Analyst’s Optimism Ahead Of Banks’ Q2 Earnings
“In the higher for longer rate environment, long rate-sensitive assets continue to reprice higher, and deposit cost pressure is slowing,” Ramsden wrote.
Goldman Sachs anticipates that banks will, on average, report a 7% year-on-year (YoY) revenue growth for the quarter. Trading revenue growth is expected to be a robust segment, projected to average 6% in Q2 2024 and 3% for the year, compared to 2% after fourth ...