US bank CEOs warn of geopolitical risks as analysts cite stability
By Lananh Nguyen, Nupur Anand and Pete Schroeder
NEW YORK (Reuters) -U.S. bank CEOs warned a slowing economy and rising geopolitical tension could weigh on earnings, but said the industry had regained its footing after the biggest bank failures since the 2008 financial crisis.
Here are quotes from a conference hosted by The Clearing House in New York:
William Demchak CEO of PNC Financial (NYSE:PNC), on risks to the outlook:
«In the near term, it's actually the fragility of our Treasury market and the funding of the U.S. government. I think we've pushed much of the capital of the large banks who traditionally would play a role in this into unregulated, highly levered, funded through prime brokerage, but we don't necessarily have a view on how that leverage plays through the system.»
«And if the Fed loses control of the back end of the yield curve as there's unwinds against those positions one way or the other, I think it's a disastrous outcome.»
Curtis Farmer, CEO of Comerica (NYSE:CMA) Bank:
«There's never been a time in my career, when there was so much uncertainty,» including geopolitical tensions and potential cyber attacks from bad actors, he said.
Michael Roberts, CEO of HSBC North America on cyber risks:
«It's out there, it's very real… it's getting more and more sophisticated.» And climate risk «is going to affect us all in ways that we don't even know.»
Thomas Michaud, CEO of investment bank Keefe, Bruyette & Woods (KBW), on the industry outlook:
«We think the banking industry's having a 10% decline in profitability… notwithstanding three of the four largest bank failures in American history happening this spring, the industry's in good shape,» but will have to weather rising loan delinquencies and competition
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