Bank revenue is expected to stagnate in 2011 due to headwinds including regulation and the cost of foreclosed homes. This comes at a time when bank operating income is low. Some analysts, like Chris Whalen, have gone so far as to warn of a new financial crisis if revenue can’t grow.
A report out today from Citi looks at the banks that will suffer most in this low growth environment.
Synovus‘ yearly revenue is projected to decline 2.1%, as customers refinance loans in zero-interest rate environment.
First Horizon‘s revenue is projected to decline 1% for similar reasons.
PNC‘s revenue is projected to decline 1.3% for problems including: “the step down in purchase accounting accretion, which we estimate to be ~$400-450 mil in 2012, or ~2.5-3.0% of revenue.”
TCF Bank‘s revenue is projected to drop 0.8%, due to loss of income from debit fees.
Regions Financial‘s revenue is projected to drop 0.1%, due to commercial real estate vulnerability and loss of debit fees.
While Citi is more bearish than consensus, everyone expects the above 5 banks to suck wind in 2011.
Here’s a look at consensus for a host of major banks.