U.S. Bank CEOs Express Confidence in Dealmaking and Consumer Health

By Tatiana Bautzer and Nupur Anand

NEW YORK (Reuters) – U.S. bank CEOs expressed confidence in the deal-making outlook and the financial health of U.S. consumers at an industry conference in New York on Wednesday.

Bank of America's buildup of advisory work on upcoming mergers and acquisitions is strong, while its pipelines for initial public offerings "are full and ready to go," CEO Brian Moynihan told attendees.

KeyCorp (NYSE: KEY) CEO Christopher Gorman noted consumers have 30% more money in their bank accounts today than they did before the pandemic, signaling "the economy is in good shape."

U.S. banks expect demand from borrowers to rise as the incoming Trump administration prepares to take office while interest rates fall. The resurgence could come after several quarters of anemic loan growth.

"We haven't seen a lot of loan demand, and I think we're going to now see the beginning of that," Gorman told the Clearing House conference.

Demand for commercial and industrial loans was flat in the second quarter, stabilizing after two years of declines, according to a Fed survey in August.

"We expect a pro-business and onshoring stance to lead to increased lending activity, which should help support a revival of loan growth across the industry," Anthony Elian, an analyst at JPMorgan, wrote in a report last week.

Banks tightened lending standards last year as the commercial real estate market deteriorated and investors became broadly concerned about the potential for a U.S. recession.

The Federal Reserve started to reduce borrowing costs in September and is expected to continue to ease monetary policy.