US BANKS SEE HIGH DEPOSIT COSTS AND INVESTMENT BANKING BOOST

U.S. lenders' second-quarter profits were squeezed by dampening loan demand and the high interest they paid to hold on to deposits, but a flurry of bond sales boosted their investment banking units. Citizens Financial, US Bancorp, First Horizon and Synchrony Financial all paid higher rates compared with a year earlier on their customers' deposits, they said on Wednesday.

The results illustrate the pressure on banks from the Federal Reserve's quantitative tightening that has pushed the benchmark interest rate to its highest since the global financial crisis in 2008. However, Wall Street operations were a bright spot. Citizens' capital market fees surged 63%, on the back of bond underwriting and loan syndication.

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