Fed rate feast leaves crumbs for bank customers

Fed rate feast leaves crumbs for bank customers - @johnsfoley -

Banks, Central Banks

1/20/2022 12:41:00 AM

Fed rate feast leaves crumbs for bank customers - johnsfoley -

Big U.S. lenders like JPMorgan are readying for an inflow of interest income as the central bank puts up rates. But the amount they pass to depositors is likely to be even more paltry than in past cycles. Competition from upstarts like SoFi may improve service but not returns.

Context NewsJPMorgan, Wells Fargo and Bank of America were among the U.S. banks that outlined potential increases to their interest income based on expected rate hikes from the Federal Reserve alongside their fourth-quarter earnings.JPMorgan said on Jan. 14 that net interest income excluding its trading business could rise to $50 billion in 2022, from $44.5 billion in 2021. Wells Fargo said the same day that it could see an 8% increase on its $35.8 billion net interest income for 2021.

Bank of America finance chief Alastair Borthwick told analysts on Jan. 19 that the lender expected “robust” net interest income growth for 2022, and that as rates rise, the portion of rate hikes it expects to pass on to depositors is up to 25%, based on past experience.

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Cancel Context News JPMorgan, Wells Fargo and Bank of America were among the U.S. banks that outlined potential increases to their interest income based on expected rate hikes from the Federal Reserve alongside their fourth-quarter earnings. JPMorgan said on Jan. 14 that net interest income excluding its trading business could rise to $50 billion in 2022, from $44.5 billion in 2021. Wells Fargo said the same day that it could see an 8% increase on its $35.8 billion net interest income for 2021. Bank of America finance chief Alastair Borthwick told analysts on Jan. 19 that the lender expected “robust” net interest income growth for 2022, and that as rates rise, the portion of rate hikes it expects to pass on to depositors is up to 25%, based on past experience. Source: REUTERS/Brendan McDermid/File Photo FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. Subjects