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Expand chart
Data: FactSet; Chart: Andrew Witherspoon/Axios

An index that tracks the major banks is underperforming the broader market. And not just in light of the stock market rout — it's underperformed for most of the past year.

Why it matters: The higher interest rate environment that's spooking investors is supposed to be good for banks. They can charge consumers more for lending, boosting profit. But the advantage is not showing up in these companies' stocks.

Why the slump in bank stocks? Analysts are pointing to banks' loan businesses, which has not been as strong as expected in a booming economy.

  • Last quarter, embattled Wells Fargo reported declining loan growth and recently warned at an investment conference that this quarter probably would not be any different.

What's going on: It isn't just that consumers are taking out fewer loans for fear of higher interest payments. There is more competition for lending from companies like Quicken Loans to private equity firms.

  • Banks are facing probably the "largest threat" from non-bank loan originators, Mark Doctoroff of MUFG's Financial Institutions Group told Axios.
  • Yes, these non-traditional lenders are backed by traditional banks, but it's not showing up as typical loan growth as it has in the past.
  • Another factor: post-financial crisis, banks have been more disciplined and diligent about the quality of loan and origination, Doctoroff points out.

What's next: A clearer picture of the health of the banks' loan business. J.P. Morgan, Citigroup and Wells Fargo report third quarter results today.

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
5 hours ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”