Finance

The largest U.S. bank by assets raised its forecast for net interest income in 2023 to $81 billion from $74 billion, a positive sign for investors wondering how an economic downturn might weigh on profits.

The Pittsburgh bank grew its deposits in the first quarter, even as the failure of two other regionals sparked outflows across the industry. But PNC executives warned Friday that rising funding costs could continue to eat into its net interest margin.

Chase, Wells Fargo both reported increased gain on sale margins in the first quarter over the fourth, a potentially promising indicator for upcoming IMB earnings.

Revenue from fixed-income, currencies and commodities trading unexpectedly rose 4% to $4.5 billion in the first quarter, as clients reacted to changing interest rates, the company says. Net income rose 7% to $4.6 billion.

The lender had $2.38 trillion of deposits at the end of March, compared with $2.34 trillion three months earlier. The influx more than offset drains from inflation and customers' seeking higher-yielding alternatives.

The firm reported $13.3 billion in NII in the first three months of the year, up 45% from a year earlier and more than the 42% jump analysts expected. That gain helped counter a surge in provisions for souring loans.

The amount of U.S. junk bonds has fallen 11% from its peak in October 2021 to $1.41 trillion, according to a Bloomberg index tracking corporate high-yield debt.

Subordinated debt issuances and asset-backed securities have helped institutions of all asset sizes weather recent market uncertainties and fuel campaigns for growth, according to executives and investment experts.

Banks and credit unions compete head-to-head in many markets, so credit union CEOs take advantage of bank earnings season to gain a little extra intel. But many will scour first-quarter results as closely as ever to determine the impact of the banking crisis on deposits flows, lending and the overall economy.

Fintechs were already clustered in New York and San Francisco. Now that most startups work with the four largest banks, it's even harder to create new technology in the heartland.