Banking companies can earn higher profits if they focus more on loan underwriting and fee income and less on cost-cutting, according to a recent study by an economist at the Office of the Comptroller of the Currency.

"Persistent positive abnormal profits appear to be driven by revenue generation, not cost control," OCC economist Karin Pafford Roland wrote in an agency working paper. "This result lends support to the argument that expansion of banking powers via insurance sales, proprietary mutual fund management, etc., will improve the profitability of bank holding companies."

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.