24
Jul
12

no investors, no more big banks

it’s that simple

Seven of the 10 biggest U.S. banks beat analysts’ average earnings expectations in the second quarter. But much of that came from cutting costs and dipping into money previously set aside to offset bad loans, rather than from growth in their main businesses, which is what investors want to see.

Revenue from lending, trading and advising corporate clients on mergers is still weak, and low interest rates continue to squeeze profits on loans and other investments. Banks and their already depressed stocks appear headed for a long, grim future.

Nancy Bush, who has been a bank analyst and investor for three decades, said she is ready to throw in the towel on banks of all sizes.

“What’s left at this point, barring a really significant improvement to the economy and a miraculous ramp-up in lending?” Bush asked. “Why invest in these companies? Somebody, give me a reason to believe.”

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