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  • NEWS Desk Global

US REGIONAL BANK PROFITS WILL BE SQUEEZED BY PRESSURE TO PAY FOR DEPOSITS




U.S. regional banks have a tougher road to growing profits in 2024 as they face pressure to pay more to depositors versus larger peers while demand from borrowers stays subdued. With the outlook for interest rates more uncertain, regional lenders' earnings will also be restrained because they are tied into securities holdings that are losing money on paper instead of making loans or investing in higher-yielding assets. "It's going to be harder," said Richard Ramsden, a banking analyst at Goldman Sachs.

"They are going to have to pay more for deposits," and loan growth will also be "challenged." For regional banks, especially those with $100 billion or less in assets, it will become increasingly difficult to make money as they compete with large and mid-sized institutions, which are perceived as safer and offer a broader range of services.

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