(JPM) U.S. Banks Stock Outlook – April 2013 – Zacks Analyst Interviews

U.S. banks entered 2013 with uninterrupted expense control, sound balance sheets, an uptick in mortgage activity and lesser credit loss provisions. Moreover, a favorable equity and asset market backdrop, falling unemployment, a progressive housing sector and a flexible monetary policy have been making the road to growth smoother. Yet top-line growth remains uncertain due to continued sluggishness in loan growth, pressure on net interest margins from the sustained low rate environment and less flexible business models owing to stringent risk-weighted capital requirements (Basel III standard). However, banks have been gradually easing their lending standards and trending toward higher fees to dodge the pressure on the top line. Moreover, U.S. banks are actively responding to legal and regulatory pressures, indicating competence to encounter impending challenges. But the potency of the sector