For universal banks including Bank of America (BAC - Get Report), JPMorgan Chase and Citigroup (C - Get Report) fundamentals appear to have stalled, according to Atlantic Equities analyst Richard Staite. "Outside of principal investment gains and other market-driven revenues, fundamental top-line growth is fairly modest at the moment as the capital markets recovery remains in fits-and-starts mode," he wrote. "Seasonal factors have helped drive sequential improvements in some areas, but [year-on-year] revenue growth is mid-single digits, outside of principal investments. Near term, we see nothing to get excited about." Longer term, a higher return on equity remain "a leap of faith," Staite said, with much uncertainty surrounding banks abilities to adjust to a new regulatory environment. Analysts will likely remain focused on how banks manage their expenses, given continuing pressures on the topline. Deutsche Bank analyst Matthew O'Connor expects to see a decline quarter-on-quarter as banks reported a number of lumpy one-time items. The big banks, specifically Bank of America and Citi, are still in restructuring mode, shedding assets and laying off employees, as they adjust to new rules and a different competitive landscape. Analysts have hailed the downsizing effort, but execution risks remain a key challenge, so the focus will be on how much progress the banks are making in meeting their targets.
Here is a round-up of what to expect from the big four banks.