In spite of the subdued market for equity trading and investment banking in the first quarter of 2010, investor has high expectations in the U.S. financial groups for strong earnings growth. Commercial banks like JPMorgan Chase will go on to benefit from the gap between the ultra-low short-term interest rates at which they borrow and the higher prices they demand for loans.
For the first time ever since the credit crisis began, analysts forecasted that the lender may not improve more lifting reserves for future loan losses and the economy. Investors expect most major U.S. banks to generate higher profits than 2009, as the sector’s post-crisis rebound goes on to gather momentum.
The KBW Bank Index has risen by 30% ever since the beginning of 2010.