Net interest margins still decline, hundreds of basis points below where they rested years ago.
As the bank incurs an interest expense on its deposit base, more deposits mean lower net interest margins.
Analysts see no near term possibility of net interest margins for banks rising.
They need to increase net interest margins sufficiently to offset rising loan losses.
Other positives included a solid reduction in headcount of 9, 000, improving net interest margins and better-than-expected improvements in credit quality.
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The overall result was a reduction in net interest margins from 3.89% for Q4 2012 to 3.56% for Q4 2012.
Finally, bank stocks are a pure play on rising net interest margins.
Both the banks reported earnings growth, but the results suggested their core businesses and net interest margins were under pressure from low interest rates.
The main issue was a virtual collapse of net interest margins despite having a retail deposit franchise advantage over virtually every other bank in China.
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Yet like Germany, Austria is one of the most overbanked markets in Europe: net interest margins have languished below 1.3% for the past six years.
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Corporate loan demand is weak and net interest margins are thin.
On the revenue side, net interest margins on new loans remain pitiful, partly because demand for loans is low and the banks are so eager to lend.
Net interest margins in Germany have been consistently below 1%.
This year, banks have posted declines in their net interest margins as authorities have cut benchmark interest rates, funding costs have risen and demand for credit has cooled.
The challenges facing the U.S. banking industry are not limited to the Too Big To Fail Wall Street set, and for regional banks thinner net interest margins are a much-discussed hurdle to growth.
The high net interest margins at Wells Fargo have, in large part, been attributed to its large low cost average core deposits (which include noninterest-bearing deposits, interest-bearing checking, savings certificates, market rate and other savings, and certain foreign deposits).
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While an increase in prime loan rates will likely impact both interest income as well as interest expense for Wells Fargo, the fact that Wells Fargo derives the majority of its funding from low cost core deposits will help the firm restrain its interest expense even as interest rates increase and thus boost its net interest margins.
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Considering continuation of low employment costs and minimal net interest expense profit margins pre-and-after tax hang in.
He wants new purchases to deliver operating margins (net before depreciation, interest and taxes) of 25% within four years.
The bank's loan portfolio and margins grew during the fourth quarter, as did its net interest margin.
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