Bank of America analysts reported that US bank CEOs expressed a constructive outlook last week, noting healthy commercial loan demand and solid consumer credit quality during management updates.
The executives characterized deposit trends as stable with manageable pricing pressures, according to the BofA report.
Canadian lender BMO, which derives over 40% of its earnings from the US, highlighted growing momentum in its US operations during its earnings call. The bank reported increased client activity across segments, industries, and geographies over the past 60 days, with pipeline strength continuing into early third quarter.
Federal Reserve H.8 data for the week ending May 20 showed loan growth tracking at 7.4% year-over-year compared to 7.5% at the end of March. Growth appears to be stabilizing across key asset classes including commercial and industrial loans, residential mortgages, commercial real estate, and auto loans.
Bank of America noted that seasonal deposit outflows have been less severe than expected. The analysts said healthy balance sheet growth, combined with higher reinvestment yields from elevated interest rates, creates potential for upside surprises to net interest income outlooks.
