6 Bank Revenue Winners and Losers From Jefferies
NEW YORK (TheStreet) -- Over the next year, continued commercial loan growth and expense reduction will be key for large regional banks to growth their revenues.
Boiling down first-quarter financial results for banks in his firm's coverage universe, Jefferies analyst Ken Usdin named three large banks in his firm's coverage universe that are "best-positioned" to grow pre-provision net revenue over the next year, with three others facing a "tougher fight."
Bank earnings are, of course, continually distorted by a seemingly ever-growing list of one-time items, and at this point in the credit cycle, most large banks are releasing loan loss reserves, by making quarterly provisions for loan loss reserves that total less than their loan charge-offs. This is why it pays to focus on pre-provision net revenue, which nets the one-time items and provisions for loan losses from gross revenue, less expenses.
Usdin said that Jefferies "wanted to re-check our pre-provision net revenue (PPNR) starting points, assumptions for net interest income (NII), fees, and expenses, and overall PPNR trajectories across our large/mid-cap regional universe."