What is the bank outlook for 2023?
Our strategists expect the Fed and other central banks around the world to keep interest rates high for most of 2023, but they believe the cycle of interest rate hikes should come to an end sometime next year. Talk of a recession has been ongoing for a while, sending bonds and equities down 15% to 25% in 2022.
Key assumptions
While net interest income (NII) may decline in 2024, we expect banks to generate a return on common equity of 10%-11% and to build capital through earnings retention, particularly as they plan for more stringent capital regulation.
“2023 defied almost everyone's expectations: recessions that never came, rate cuts that didn't materialize, bond markets that didn't bounce, except in short-lived, vicious spurts, and rising equities that pained most investors who remained cautiously underweight,” said Candace Browning, head of BofA Global Research.
Market events like the regional banking crisis crated a flight to quality catalyst for the asset class as well. All in all, 2023 was a conducive environment for asset growth in the MMF space. As the fed tightening cycle matures and most likely ends in 2024, the potential for MMF assets to decline will increase.
The interest rate environment was the most frequently cited top concern for banks and credit unions in 2023. The percentage of executives concerned about cost of funds jumped to more than 43% for 2023, from just 8% last year. Growing deposits will be a priority in 2023.
Bank stocks have lagged behind the broad market for most of 2023, and the failure of three large institutions early in the year may have left a sour taste in investors' mouths. But some bank stocks are attractively priced right now, and targeted investments in the sector may turn out to be lucrative in 2024.
2024 poses diverse challenges for financial institutions, including compliance risks, interest rate fluctuations, credit instability, AI-enhanced fraud, and geopolitical shocks. A proactive and strategic approach is crucial to navigate this complex landscape successfully.
What is BAC's average 12-month price target, according to analysts? Based on analyst ratings, Bank of America's 12-month average price target is $37.87. What is BAC's upside potential, based on the analysts' average price target? Bank of America has 2.74% upside potential, based on the analysts' average price target.
Although Bank of America had a hypothetical hiring freeze last year, Moynihan said the bank actually hired 15,000 people in 2023, but ended the year down 5,000 people. It will end the first quarter down a few more. Managing directors who've worked for the bank told us it's unusual for BofA to cut so close to bonuses.
CHARLOTTE, NC – Bank of America today announced it will expand its financial center network into nine new markets over the next four years, bringing banking, investing, retirement, lending and small business services and solutions to more clients and communities.
What is the best place to invest money in 2023?
- Treasury bills (T-bills): Best for those with a lower risk tolerance. ...
- High-yield savings accounts: Best for those who still want access to their money. ...
- Certificates of deposit (CDs): Best for those who have a specific timeline in mind and won't need access to their money before then.
| Bank | APY* | Great for |
|---|---|---|
| EverBank | 4.30% | Savers who don't want to worry about fees or minimum opening deposits |
| Redneck Bank | 4.90% | Savers who have at least $500 on hand |
| Sallie Mae Bank | 4.65% | Savers who can keep $100 in their account |
| UFB Direct | 5.25% | Savers who can maintain a $5,000 balance |
Investors are likely drawn to the stock market now as it continues to hit fresh highs. After the market tanked in 2022, it came roaring back last year. The S&P 500 soared 24% in 2023, and it started to hit fresh, all-time highs throughout the month of January this year.
| Bank NameBank | CityCity | Closing DateClosing |
|---|---|---|
| Heartland Tri-State Bank | Elkhart | July 28, 2023 |
| First Republic Bank | San Francisco | May 1, 2023 |
| Signature Bank | New York | March 12, 2023 |
| Silicon Valley Bank | Santa Clara | March 10, 2023 |
In short, if you have less than $250,000 in your account at an FDIC-insured US bank, then you almost certainly have nothing to worry about. Each deposit account owner will be insured up to $250,000 - so, for example, if you have a joint account with your spouse, your money will be insured up to $500,000.
There are 5 bank failures in 2023. See detailed descriptions below. For more bank failure information on a specific year, select a date from the drop down menu to the right or select a month within the graph.
Deloitte expects bank profitability in 2024 to be tested due to higher funding costs and sluggish revenue growth. Banks with diversified revenue streams and strong cost discipline are likely to boost profitability and market valuation.
The SIPC will replace any missing stocks, bonds, and other securities up to $500,000 per account, including a certain amount in cash. (See the SIPC website for details.) Losses exceeding these limits could eventually be recovered if there are adequate proceeds after the firm's liquidation.
Interest rates that spiked in 2022 and last year — driven by Federal Reserve policy to tame inflation in the pandemic's wake — created a host of challenges for banks big and small. That included a surge in deposit costs, curbed loan demand amid high borrowing costs and increased potential for credit losses.
The collapses of Silicon Valley Bank and Signature Bank in March 2023—then the second- and third-largest bank failures in U.S. history—took consumers by surprise. Subsequently, three more banks failed in 2023: First Republic Bank in May, Heartland Tri-State Bank in July and Citizens Bank of Sac City in November.
Will there be more bank failures in 2024?
There is a systemic risk of large-scale bank failures in the U.S. in 2024 due to charge-offs and write-downs emanating from the commercial real estate sector. Bank regulators have been vocal about their concerns that the too-big-too-fail banks would have sufficient capital to cover losses and a recession.
The future of banking will look very different from today. Faced with changing consumer expectations, emerging technologies, and new business models, banks will need to start putting strategies in place now to help them prepare for banking in 2030. Explore eight key trends below that are changing the banking landscape.
Bank of America stock price stood at $36.75
According to the latest long-term forecast, Bank of America price will hit $45 by the end of 2024 and then $55 by the end of 2025. Bank of America will rise to $65 within the year of 2026, $70 in 2027, $80 in 2028, $90 in 2029, $95 in 2030, $100 in 2031 and $110 in 2034.
Is Bank of America stock a Buy, Sell or Hold? Bank of America stock has received a consensus rating of buy. The average rating score is A1 and is based on 45 buy ratings, 21 hold ratings, and 5 sell ratings.
Apple Stock Forecast
The 31 analysts with 12-month price forecasts for Apple stock have an average target of 205.32, with a low estimate of 158 and a high estimate of 250. The average target predicts an increase of 19.87% from the current stock price of 171.29.
