In the last five trading days, earnings releases were in full swing for banking stocks. Effective cost-control initiatives and absence of high legal expenses helped banks that have reported so far to outpace the respective Zacks Consensus Estimate.
Banks were easily able to surpass estimates owing to downward revisions just before the releases. The concerns that led to the estimate revisions by analysts appear justified, as the overall low interest rate backdrop remained challenging for banks, adversely impacting net interest income. Also, pressure on revenues continued to strain bottom-line growth.
Further, legal issues (though of lesser magnitude) pertaining to business misconducts continued to make headlines over the last five trading sessions. Citigroup Inc. (C – Analyst Report) will soon refund roughly $700 million to nearly 8.8 million customers who were victimized by illegal credit card practices.
