U.S. Banking Quarterly Comment: 2Q14 (Environment Constraining Earnings)

...Net Income Generally Lower: Reported net income for the largest 17 U.S. banks included in this report generally decreased on a linked-quarter basis due to elevated legal and regulatory- related costs and depressed trading revenues, partially offset by lower provision expenses, improved mortgage banking results on a sequential basis, and some one-time gains. Most Big Banks Impacted by Environmental Costs: Core results for the top six U.S. banks, included in the table below, were lower on average, from both the prior quarter and last year primarily reflecting lower capital markets results, and continued elevated legal expenses. However, excluding Citi's large one-time legal related items, results were fairly clean, with little impact from noncore items. Fitch views elevated legal costs and subdued FICC revenues as likely to persist over the near term. At Last, Some Revenue Growth, One-Timers Helped: Despite continual compression in the NIM (falling a further six bps on average for the commercial...

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