What Bank Earnings Tell Us About the Economy

2020-10-23T21:36:25+00:00October 23rd, 2020|Banks, Earnings Season|

It’s been a wild ride for the Select Bank Revenue(.BLXSBR) and Select Bank Earnings(.BLXSBE) indexes. Revenue for the sector dropped slightly as the Covid-19 crisis started, but remained well above levels from a couple years ago.BLX Select Bank Revenue Index

Bank earnings, however, dropped sharply as banks increased their loan loss provisions in expectation of large future losses:

BLX Global Select Bank Earnings

Last quarter banks complemented their dismal results with gloomy outlooks. Analysts scrambled […]

Here Come Bank Earnings: There Simply is no Precedent

2020-04-13T20:53:38+00:00April 13th, 2020|Banks, Earnings Season|

Bank earnings reports provide a key vantage point from which to understand the economy.   In the past few years, most banks have consistently grown earnings, and consistently exceeded  analyst estimates. However, analysts have had a difficult time predicting bank earnings in the time of coronavirus.

As Chris Kotowski of Oppenheimer wrote:

This earnings preview is the most difficult to write in our careers because there is simply no precedent

On the one hand, increased market volatility will drive higher trading revenue. On the other hand, banks will need […]

3 Key Themes From Bank Earnings Reports

2019-10-24T03:24:37+00:00October 24th, 2019|Banks, Earnings Season, Indexes|

Earnings season is now in full swing. Banks led the way with a flurry of earnings reports reflecting key themes in the global economy:

  • The trade war is a constant worry for corporate clients and we are just beginning to see the financial markets impact.   
  • The US consumer economy is strong, but bank executives are seeing signs of growing unease. 
  • Banks are in a technological arms race that will require significant ongoing investment to stay competitive

BLX Bank Indexes

Against […]

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