Banks to raise interest rates on loans

10/05/05 - Punk Ziegel & Co.

NEW YORK, October 5 (newratings.com) – Analyst Richard X Bove of Punk Ziegel & Co believes that banks would be forced to raise their interest rates on loans at a much faster pace in the near future.

In a research note published this morning, the analyst mentions that the earnings of banking companies depend largely on unit volumes rather than on margins. A failure to increase the yield on earnings assets would force the banking segment to raise interest rates in the future, the analyst points out. Banks are expected to change their asset mix and adopt a more rational pricing strategy in the future, according to Punk Ziegel & Co.