Betas in Focus as Big Banks Post Strong Earnings

Investors are closely watching banks' deposit and loan betas as the Fed lowers rates, S&P Global Market Intelligence wrote. Such metrics aren't perfect; many banks with high deposit betas also have high loan betas, for instance. But in general, institutions that can lower deposit costs quickly and are less asset-sensitive-i.e., those that don't rely heavily on variable-rate loans-could be poised to outperform. 

Another S&P post discusses how big banks have enjoyed strong earnings thus far this earnings season. "Deposit dynamics seem to be behaving as well as we could hope at the start of this easing cycle, with rate-seeking behavior easing and negative mix shift slowing," analysts at Piper Sandler said.

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Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi
Arlington, VA
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