Loan Growth Drives Earnings as Deposit Costs Rise

Banks are broadly expected to report solid second-quarter earnings as higher rates and continued loan growth support net interest income, even as investors remain focused on rising deposit costs and the potential for further pressure on net interest margins, S&P Global Market Intelligence wrote.

A complimentary S&P article discussed the acceleration in loan growth during the second quarter, led by the industry’s largest banks, while continued funding competition and compressed loan spreads raised questions about how long that momentum can be sustained.