Sep
24

Bank Bummer

While bank profits rose 21% in Q2 ’12 compared to a year earlier, looks can be deceiving. Much of the increase is due to one-time releases from loan-loss reserves. Worse, net interest margins fell to 3.46% in Q2 from 3.52% in Q1. And margins will shrink further as yields on deposits can’t fall more, and old loans issued when rates were higher mature and are replaced by lower-yielding ones.

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