GO
Loading...

Bove Predicts a 'Sloppy Quarter' for Bank Earnings

Banks are going to have a "pretty tough" time logging a 15th-straight quarter of higher year-over-year earnings, banking analyst Dick Bove told CNBC on Tuesday.

The major banks, including JPMorgan and Wells Fargo, begin to report second quarter profits on Friday.

Vote
Vote to see results
Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

"This should be a sloppy quarter," Bove said in a "Squawk Box" interview. "The reason is pretty simple: Banks do pretty much what the economy does."

(Vote Now on Facebook in the "Squawk Box" Armchair Analyst Poll)

The final revision for first quarter economic growth was a more tepid 1.8 percent annual rate than previously estimated. And when the government releases its first look at second quarter growth later this month, the number won't be good, Bove said.

"We did not have a great second quarter from an economic standpoint," he said. "So we're not going to have a great second quarter in terms of bank earnings."

He ticked off the reasons: "Loan volume in the two big areas, commercial industrial and residential mortgage, have slowed down dramatically. Price competition has picked up to push margins lower."

"You got this issue with long-term rates going up creating issues about capital," he added. "You've got the fact that trading did pick up pretty good for a couple months in the quarter, but wasn't great the whole quarter."

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.

Symbol
Price
 
Change
%Change
JPM
---
WFC
---

Featured

Banks