U.S. Banks 2Q24: Resilient Results in an Unsteady Environment

This commentary reviews 2Q24 results and outlook for U.S. Banking Organizations.

Key highlights include:

-- For 2Q24, Morningstar DBRS-rated U.S. banks performed slightly better than our expectations during what is still a complicated operating environment.
-- Quarterly trends included strong fee income, particularly for those with capital markets businesses, moderating declines in net interest income, muted loan and deposit growth, stable asset quality and strong capital.
-- Looking ahead, we see few, if any, changes to our bank credit ratings during the second half of the year, given that more than 90% of Morningstar DBRS-rated banks currently have Stable trends, supported by our expectation of a still growing, U.S. economy.

“Looking forward, we expect the impact of 'Basel III endgame' to be manageable even in its current form, given current capital levels and the reasonable phase-in period, but we recognize that changes in favor of the industry are likely forthcoming, especially considering recent commentary from Federal Reserve Chair Powell," said Michael McTamney, CFA, Senior Vice President - NA Financial Institution Ratings.