It is only April, but some on Wall Street are already predicting a rotten 2016 for U.S. banks.
Concerns about economic growth in China, the impact of persistently low oil prices on the energy sector, and near-zero interest rates are weighing on capital markets activity as well as loan growth.
Analysts forecast a 20% decline on average in earnings from the six biggest U.S. banks, according to Thomson Reuters I/B/E/S data. Some banks, including Goldman Sachs, are expected to report the worst results in over ten years.
"What's concerning people is they're saying, 'Is this going to spill over into other quarters?'" Goldman's lead banking analyst Richard Ramsden said in an interview. "If you do have a significant decline in revenues, there is a limit to how much you can cut costs to keep things in equilibrium."
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