Banks Brace for the Downside of Higher Rates

By Anonymous

Banks have said that superlow rates were crimping profits. But higher rates can hit earnings too

Banks have enjoyed a profit boost from rising interest rates over the past couple of years. But now those higher rates could turn into a drag.

Higher rates enable banks to charge more on loans. But they also can hit the banks’ mortgage businesses, since the higher interest payments could make some consumers think twice about buying a home or refinancing. What’s more, rising rates are forcing banks to start paying some depositors more.