Tuesday, August 6, 2013

NCBA says slow growth is 'new normal'

The N.C. Bankers Association came out with an economic forecast Monday, and it was far from optimistic. First sentence: "The U.S. economy is stuck in a rut and will continue to disappoint for several more quarters." Consumer spending is still "in the doldrums." Employment "continues to confuse and frustrate." Manufacturing "continues to sputter." At least they say the housing and stock market will continue to do well.

What's it mean for banks? Well, profitability is getting better, but the forecast makes it seem that could come into doubt unless there's meaningful recovery. Net interest margins are about the smallest they've been, and the forecast says cost cuts to make up for it will have to slow as compliance costs keep going up.

NEW WELLS CREDIT CARD TO HELP PAY DEBT: New credit card offerings from Wells Fargo will give a 1 percent rebate that goes toward paying down a loan the customer has at another part of the bank, Retuers reports. Modeled after a six-year-old Home Rebate Card, the new cards will offer a similar benefit for car, student and other consumer loans.

The cards come at a time when consumers are still somewhat debt-averse. Philosophically, the cards are similar to a somewhat-recent Bank of America offering that gave people cash reward for paying off debt.

****This is a preview of The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. *****

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