US banks gain from Fed rate hikes while keeping deposit interest low
The largest US banks are benefiting from the Federal Reserve’s campaign to increase interest rates, charging more for consumer loans and corporate lines of credit without offering customers significantly better rates on deposits.
However, leading lenders including JPMorgan Chase, Citigroup and Wells Fargo made clear on Friday that the central bank’s hawkish policy could cost them in the longer-term, increasing provisions for potential credit losses resulting from an economic downturn.
The banks’ results were flattered by net interest income — the difference in what they pay on deposits and earn from loans and other assets. JPMorgan reported NII of $17.6bn in the third quarter, up 34 per cent year-on-year and a new record for the bank. Wells and Citi reported their best NII numbers since 2019.
This story originally appeared on: Financial Times - Author:Joshua Franklin
