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So far this year, a lot of financing deals are actually coming back to banks from private credit. In the first quarter, almost $12b of debt previously from direct lenders was refinanced via the so-called broadly syndicated loan market, a channel dominated by banks. This was a sharp reversal of the opposite pattern in the prior two quarters.
The bottom line is that megabanks with fee streams from investment banking and trading are likely to continue to outperform regional banks, whose interest-income prospects are uncertain at a time of shifting expectations on rates. Among S&P 500 banks, the top performers this year are Citigroup, Wells Fargo WFC -1.09%decrease; red down pointing triangle, JPMorgan and Bank of America.
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