Housing slowdown may hit bank profits ("Positives are starting to fade")

[Human Torch]

Housing slowdown may hit bank profits
Regulators warn that the few 'positives are starting to fade' in banking.
September 29 2006: 5:29 PM EDT

WASHINGTON (Reuters) -- Earnings at U.S. banks were strong in the second quarter but may soften with a cooling real estate market and higher lending costs as the economy digests the recent spate of interest rate hikes, a U.S. bank regulator said on Friday. The Office of the Comptroller of the Currency said during a briefing with reporters on the condition of the banking industry that a few positive aspects of the economy that helped banks achieve record earnings are showing signs of slowing.

"Positives are starting to fade," said Nancy Wentzler, deputy comptroller for global banking and financial analysis, pointing to the once-hot real estate sector.

"It certainly started to cool this summer in August," she said. "And now we are seeing a little more emphatic reduction in some of the housing and housing-relating activity that had been a big boon to bank earnings."

Banks that have enjoyed strong growth in deposits are experiencing slower growth as the rise in interest rates has made time-sensitive accounts such as certificates of deposits, which carry higher interest rates, more appealing to customers, she said.

http://money.cnn.com/2006/09/29/news/companies/banks_housing.reut/index.htm?cnn=yes

[hatrack]

1. Wow! Pretty perceptive of the banking sector, huh?

Sure wish I could do slashing-yet-subtle analysis like that!

:puke:

[Systematic Chaos]

2. Translation, brought to you by the Mogambo Guru:

W E ' R E

F R E A K I N G

D O O M E D ! ! ! ! !

:scared:


On edit - I can NEVER get that stupid emoticon right.