Q1 Outlook for U.S. Commercial Banks As Institutions Try to Combat Revenue Headwinds

Banks continued to battle liquidity pressures in the third quarter, leading to further declines in net interest margins. However, the pace of margin compression slowed and the key profitability metric should soon hit a trough. Bank stock valuations remain depressed though, with investors eyeing the prospect of higher credit losses on the horizon as notably higher rates test the credit worthiness of borrowers. While banks have taken a defensive posture, institutions have also sought to combat revenue headwinds by looking to fintech partnerships and technology, including artificial intelligence, to improve efficiency and grow, but regulators are closely watching the adoption and have heavily scrutinized some banks due to compliance shortfalls.

Tune in to hear the latest from S&P Global Market Intelligence’s FIG research team. Nathan Stovall, Director of FIG Research, will review his proprietary outlook for commercial bank performance and Tom Mason, Senior Research Analyst covering U.S. Financial Technology, will discuss AI use cases for banks and fintech partnership trends.