it hard to see bank's lending book increasing at the same expotential growth that they have now had for many years. no doubt margins are tightening and their is more reliance on deposit funding rather then debt funding. competition is still very strong so it will be hard to increase fees without some type of negative effect. as said before bad debts are low and even if they increase they are by internarional standards still quiet low. i think bank's will suffer the same fate as the economy which is still too early to call. market has already priced in a reduction in future bank earnings as p/e's are low and yields are historically high. the question is can the banks increase their earnings and continue to pay higher dividends and therefore provide value for investors. i am completely out of financials ( except AXA ) and have been since Nov last year but i must admit that are starting to look very cheap which scares me.
