S&P Global Market Intelligence report finds earnings are expected to fall 2.8% year-over-year in 2024

Higher credit costs are expected to serve as a modest headwind to U.S. bank earnings this year, according to S&P Global Market Intelligence’s newly released U.S. Bank Market Report. U.S. bank earnings are expected to dip 2.8 percent year-over-year, excluding the purchase gains associated with the three failed bank acquisitions in 2023, as modest margin pressure and notably higher credit costs prevent earnings growth.

“Even as interest rates are expected to fall in the second half of 2024, deposits remain firmly in focus for U.S. banks,” said Nathan Stovall, director of financial institutions research, S&P Global Market Intelligence. “Customers continue to shift funds into higher-cost products and demand higher rates for their funds, while regulators are encouraging banks to hold more liquidity, leading to pressure on net interest margins. That pressure will eventually subside but will be replaced by higher credit costs, particularly as banks begin to