- Receding rate cuts mean less pressure on margins
- UK mortgage rates have started to widen again
The first-quarter bank reporting season underlined the receding threat of multiple interest rate cuts this year. While bank margins endured some pressure from churning customer deposits, the broader picture looks positive enough that analysts have been either upgrading their forecasts, or at least saying that banks will at the minimum meet their own stated targets for the year. There seemed to be a note of cautious optimism, which contrasted greatly with the gloom of the past decade.
With the picture looking generally benign for banks based on stable interest rates and a gently rebounding housing market, the only real differentiator now is how well the institutions are faring operationally. There was a distinct impression that the banks with the fewest outside distractions were enjoying a greater share of the market limelight.