Quick access to main page (top) Direct access to main contents Quick access to main page (bottom)

Could Higher Interest Rates Be Good News for Bank Stocks? Analysts Weigh In

Daniel Kim Views  

Analysts suggest that the current rise in U.S. interest rates could be interpreted positively for bank stocks, provided expectations for a soft landing in the sector remain steady ahead of the third-quarter earnings reports.

Ahn So Eun, an analyst from KB Securities, commented that while consensus forecasts for third-quarter bank earnings suggest a decrease in net interest income, there is an anticipated increase in non-interest income. She noted that concerns about the decline in net interest income are prevalent, with some banks attempting to temper market expectations for strong net interest income during financial conferences in early September.

Typically, the pressure on banks’ interest rate spreads increases when the benchmark interest rate is lowered, which poses a risk to net interest income. However, Ahn pointed out that concerns about bank earnings have eased since the Federal Reserve began reducing rates in September. As a result, she expects investor sentiment towards bank stocks to remain relatively positive this earnings season.

Following the September Federal Open Market Committee (FOMC) meeting, market expectations for further interest rate cuts have softened. This shift has increased long-term interest rates, potentially mitigating the downward pressure on bank stocks’ net interest income that some feared earlier in the year.

Ahn also highlighted that the Federal Reserve’s strong focus on supporting the labor market through precautionary rate cuts may provide further relief for banks. A stable employment environment boosts loan demand and helps maintain loan quality, minimizing risks such as rising delinquency rates. As a result, stable employment could act as a buffer, helping to support bank earnings despite fluctuations in interest income.

Daniel Kim
content@viewusglobal.com

Comments0

300

Comments0

[BUSINESS] Latest Stories

  • Trump’s Win Sends Japanese Stocks Soaring, While China Feels the Squeeze
  • Trump’s Victory Could Reshape the Chip Industry – Here’s Why South Korea Is Worried
  • China Deepens Financial Ties with Saudi Arabia, Could Threaten U.S. Dominance
  • Stellantis Plans 1,100 Layoffs in Ohio, Cites Need to ‘Regain Competitiveness’
  • Google’s AI Push in Oil-Rich Saudi Arabia Sparks Climate Concerns
  • NVIDIA Backs China’s Self-Driving Frontier with DeepRoute.ai Partnership

Weekly Best Articles

  • Russia’s Secret Weapon? North Korean Troops Reported in First Ukraine Clash
  • Trump’s Win Sends Japanese Stocks Soaring, While China Feels the Squeeze
  • Will Trump’s Trade Promises Slam South Korea’s Exports? Bank of Korea Thinks So
  • Trump’s Victory Could Reshape the Chip Industry – Here’s Why South Korea Is Worried
  • China Deepens Financial Ties with Saudi Arabia, Could Threaten U.S. Dominance
  • Will Kim Jong Un Congratulate Trump on His Return? North Korea’s Response in Question
  • Dodgers Manager Hints at Top Picks for Next Season—Any Big Names Returning?
  • South Korea Eyes Military Cooperation with NATO as North Korea Threatens Ukraine Stability
  • Stellantis Plans 1,100 Layoffs in Ohio, Cites Need to ‘Regain Competitiveness’
  • U.S., South Korea, and Allies Warn of Russia-North Korea Nuclear Tech Transfer
  • China Reacts to Trump’s Victory: ‘Respecting the Choice of the American People’
  • South Korean President Issues Rare Apology, Admits to ‘Oversight and Lack of Virtue’

You May Also Like

  • 1
    Salmon Sperm for Skin? Brazilian Model Swears by This Pricey New Trend

    LIFESTYLE 

  • 2
    Massive DDoS Attack Cripples South Korea’s Defense Site—North Korea or Russia?

    ASIA 

  • 3
    North Korea Tests 600mm Super-Large Rocket Launcher, Capable of Tactical Nuclear Strikes

    LATEST 

  • 4
    Experts Slam 'North Korean Soldiers' Claims in Ukraine as Pure Fiction

    DEBATE 

  • 5
    No Women on the Throne: Japan Says ‘No’ to UN’s Call for Gender Equality in Royal Succession

    DEBATE 

Popular Now

  • 1
    North Korean Families Go Missing After Talking Trash About Kim Yo Jong

    DEBATE 

  • 2
    North Korea Delays Putin Meeting Report—What’s the Real Reason?

    ASIA 

  • 3
    Ukrainian Journalist Shares Shocking Footage of North Korean Troops in Russia

    LATEST 

  • 4
    North Korea’s Double Threat: Missiles and Nukes Target U.S. and South Korea

    DEBATE 

  • 5
    Kim Jong Un Sends ‘Thank You’ Gifts to North Korean Flood Recovery Workers

    ASIA 

Weekly Best Articles

  • Russia’s Secret Weapon? North Korean Troops Reported in First Ukraine Clash
  • Trump’s Win Sends Japanese Stocks Soaring, While China Feels the Squeeze
  • Will Trump’s Trade Promises Slam South Korea’s Exports? Bank of Korea Thinks So
  • Trump’s Victory Could Reshape the Chip Industry – Here’s Why South Korea Is Worried
  • China Deepens Financial Ties with Saudi Arabia, Could Threaten U.S. Dominance
  • Will Kim Jong Un Congratulate Trump on His Return? North Korea’s Response in Question
  • Dodgers Manager Hints at Top Picks for Next Season—Any Big Names Returning?
  • South Korea Eyes Military Cooperation with NATO as North Korea Threatens Ukraine Stability
  • Stellantis Plans 1,100 Layoffs in Ohio, Cites Need to ‘Regain Competitiveness’
  • U.S., South Korea, and Allies Warn of Russia-North Korea Nuclear Tech Transfer
  • China Reacts to Trump’s Victory: ‘Respecting the Choice of the American People’
  • South Korean President Issues Rare Apology, Admits to ‘Oversight and Lack of Virtue’

Must-Reads

  • 1
    Salmon Sperm for Skin? Brazilian Model Swears by This Pricey New Trend

    LIFESTYLE 

  • 2
    Massive DDoS Attack Cripples South Korea’s Defense Site—North Korea or Russia?

    ASIA 

  • 3
    North Korea Tests 600mm Super-Large Rocket Launcher, Capable of Tactical Nuclear Strikes

    LATEST 

  • 4
    Experts Slam 'North Korean Soldiers' Claims in Ukraine as Pure Fiction

    DEBATE 

  • 5
    No Women on the Throne: Japan Says ‘No’ to UN’s Call for Gender Equality in Royal Succession

    DEBATE 

Popular Now

  • 1
    North Korean Families Go Missing After Talking Trash About Kim Yo Jong

    DEBATE 

  • 2
    North Korea Delays Putin Meeting Report—What’s the Real Reason?

    ASIA 

  • 3
    Ukrainian Journalist Shares Shocking Footage of North Korean Troops in Russia

    LATEST 

  • 4
    North Korea’s Double Threat: Missiles and Nukes Target U.S. and South Korea

    DEBATE 

  • 5
    Kim Jong Un Sends ‘Thank You’ Gifts to North Korean Flood Recovery Workers

    ASIA 

Share it on...