US banks slide as executive comments cloud optimism over easing capital requirements
Updates
** The largest U.S. lender by assets JPMorgan Chase JPM.N leads declines in major bank stocks, with ~7% drop on Tuesday after its president tempered expectations on its income from interest payments
** Morgan Stanley MS.N and Goldman Sachs GS.N also fall ~2.8% and ~5%, respectively, as top executives from both investment banks flag pressure on their mainstay businesses at an industry conference
** MS Co-President Dan Simkowitz says activity for mergers, acquisitions and initial public offerings to remain below trends for the rest of the year
** Goldman CEO, aftermarket on Monday, said trading revenue will probably slip 10% in Q3 because of sluggish conditions last month, echoing similar comments from Citigroup C.N CFO who forecast a 4% decline
** Downbeat sector comments dim optimism after Federal Reserve's Michael Barr eased two major draft bank capital rules following intense industry opposition
** Overall, the plans had together envisaged hiking capital by around 19% for the biggest U.S. lenders; but following a major re-write of the draft, that figure will now fall to 9%, Barr says
** Rivals Citi and Wells Fargo WFC.N decline 4% and 1.7%, respectively; WFC's CFO says it was not changing its forecast for interest income - a bank's profits on the difference between what is paid on deposits and earned off loans
** S&P 500 Banks Index .SPXBK - tracking large-cap banks - last down ~4.5% vs ~0.4% fall in the S&P 500 .SPX; KBW Regional Banking Index .KRX falls ~2.7%
Reporting by Jaiveer Singh Shekhawat and Manya Saini in Bengaluru
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