Higher rates lift bank lending profits
The Fed’s inflation fight is helping banks make more from lending, Hope writes.
Catch up quick: JP Morgan, Morgan Stanley, Wells Fargo and Citigroup released second-quarter earnings results this week.
- Each reported a yearly jump in net interest income — the difference between what they charge people to borrow money and what they pay people to deposit money — thanks to higher interest rates set by the Fed.
Why it matters: It's an upside to rate hikes, which have been cooling demand for other banking products and services.
By the numbers: Citigroup's net interest income grew 14% from last year to nearly $12 billion, for example.
- That increase more than offset a roughly $700 million (or 46%) dip in investment banking revenues as corporate clients shied away from financing amid market volatility this year.
What to watch: Bank of America and Goldman Sachs report Monday morning.