Enter multiple symbols separated by commas

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 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.


  • Management shakeup: Catalyst for investment?

    Philippe Bodereau, MD & global head of financial research at Pimco, reveals whether earnings and new management roles have made him more bullish on European banks.

  • This is the top credit risk for Asian banks

    Eugene Tarzimanov, VP and senior credit officer at Moody's Investors Service, explains why the unwinding of asset bubbles is the biggest risk for Asian banks in the months ahead, followed by China's slowdown.

  • Fred Hochberg and Penny Pritzker

    The Commerce Secretary and head of the Export-Important Bank urge Congress to put U.S. businesses first and reauthorize the bank.