Citi analyst on US banks' profits, margin view as Fed pause
US .. banks have so far delivered a mixed bag of financial results, but this is probably the sector's best this year, especially if the Federal Reserve does not raise interest rates at all, according to a Citi analyst.
Morgan Stanley and Bank of America are scheduled to report revenue this week.
With the Fed already signaling that it did not expect to raise interest rates this year, the banking industry's ability to generate higher profits in the coming months could be limited, said Ronit Ghose, the global banking research leader at Citi.
"When we look at profitability, especially net interest margins … we think we are in top margins right now, we think this is as good as it gets both in terms of net interest margins and profitability," he told CNBC's capital bond on Tuesday.
Net interest margin is a very monitored indicator that measures the bank's lending gain. The potential absence of further Fed up interest rates means banks may not be able to charge more on loans in the coming months.
"If we don't see more interest rate increases, it's likely … that's not good news for margins going on," Ghose said.