NEW YORK, April 10 (Reuters) – Most Wall Road banks are more likely to report decrease quarterly earnings and face a dour outlook for the remainder of the yr, with final month’s regional banking disaster and a slowing economic system anticipated to harm profitability.

Earnings per share for the six greatest U.S. banks are anticipated to be down about 10% from a yr earlier, analyst estimates from Refinitiv I/B/E/S present. Banks begin reporting outcomes on April 14.

Entry to low cost deposits, which swelled for greater banks as savers fled smaller lenders within the wake of Silicon Valley Financial institution’s collapse final month, probably boosted internet curiosity revenue for the most important banks, analysts mentioned.

JPMorgan Chase & Co (JPM.N), the most important U.S. financial institution, is more likely to come out forward of the pack as its internet curiosity margin – curiosity earned on loans versus curiosity paid to depositors – was greater than a few of its friends, analysts mentioned.

The financial institution is anticipated to report a 30% rise in EPS, buoyed by an nearly 36% enhance in internet curiosity revenue, in accordance the Refinitiv I/B/E/S estimates and Reuters calculations.

Nonetheless, tighter monetary situations and a slowing economic system imply banks face the prospect of tepid mortgage progress and souring credit score, forcing them so as to add to provisions in opposition to potential losses.

“We count on a difficult earnings season for the banks,” mentioned David Chiaverini, banking analyst at Wedbush Securities, in a observe.

He mentioned financial institution managements will turn into extra defensive, implementing liquidity measures that would result in downward revisions for internet curiosity revenue.

Earnings are additionally more likely to be hit by one other dry spell for offers and capital markets exercise, and a few analysts are predicting a slowdown in buying and selling income as effectively. These tendencies would particularly hit funding banking powerhouses like Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N).

Buying and selling revenue, a silver lining within the earlier quarters, may endure from decrease equities buying and selling within the first quarter versus a yr earlier, partially offset by energy in fixed-income, currencies and commodities (FICC), analysts mentioned.

Goldman’s earnings per share may fall by a fifth, harm by funding banking woes, after a bigger-than-expected 69% drop in fourth-quarter revenue, harm by wealth administration income and shopper enterprise losses.

The six banks declined to touch upon upcoming outcomes and forecasts.

The S&P 500 financial institution index (.SPXBK) is down 14% year-to-date.

As rates of interest rise, banks make more cash on debtors’ curiosity funds than they pay out to depositors.

Internet curiosity revenue for the six greatest U.S. banks are anticipated to be up about 30% from a yr earlier, in line with analyst estimates from Refinitiv I/B/E/S.

Nonetheless, features from curiosity funds could also be offset by dangerous loans.

“There’ll nonetheless be incremental will increase in provisions coming on this yr,” significantly for business actual property and probably shopper bank cards, mentioned Ana Arsov, head of the North American banking group at score company Moody’s Traders Service.

She expects a lending slowdown in areas equivalent to business and industrials, autos and mortgages.

Traders will scrutinize steadiness sheets to find out which lenders attracted or misplaced deposits in the course of the March banking disaster, whereas assessing its impression on lending and the U.S. economic system.

The outcomes will give a snapshot of how readily lenders can fund operations and whether or not they have sufficient cushion to deal with shocks.

“The fears over financial institution capital and liquidity ranges are more likely to persist for a minimum of the subsequent few months due to the latest stresses,” Gennadiy Goldberg, U.S. rate of interest strategist at TD Securities, mentioned in an interview.

Earnings per share estimates from Refinitiv I/B/E/S

Reporting by Saeed Azhar in New York and Mehnaz Yasmin in Bengalaru; Extra reporting by Nupur Anand and Tatiana Bautzer; Enhancing by Lananh Nguyen and Richard Chang

Our Requirements: The Thomson Reuters Belief Ideas.