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The Zacks Analyst Blog Highlights: Bank of New York Mellon, BB&T, Fifth Third Bancorp and KeyCorp

For Immediate Release

Chicago, IL – April 21, 2016 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Bank of New York Mellon Corporation (BK), BB&T Corporation (BBT), Fifth Third Bancorp (FITB) and KeyCorp. (KEY).

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Here are highlights from Wednesday’s Analyst Blog:

What's in Store for These Banks in Q1 Earnings Season?

The banking sector experienced a healthy run on the bourse so far this earnings with the key stocks trading in the green. The results have been largely benefitted by effective cost control and the absence of major legal overhangs. However, higher provisions stemming from the weakness in the energy sector have been a major drag. As a desperate measure, banks have resorted to every cost-saving opportunity to boost their bottom-line performance.

Also, first quarter, usually being a strong one for the banks, was an exception this year owing to a tough environment with heightened market volatility, decline in commodity prices, weak emerging markets, restricted business and consumer spending, rate hike uncertainty and declining energy prices.

Notably, per our Earnings Preview report, overall earnings for the Finance sector in first-quarter 2016 are expected to be down 10.7%.

Let’s have a look at the four major banks that are scheduled to release their results on Apr 21.

The Bank of New York Mellon Corporation (BK) is less likely to beat the Zacks Consensus Estimate as the strengthening of the U.S. dollar is expected to impact Investment Management revenues. Nonetheless, the company’s overall expenses are likely to remain relatively stable on a year-over-year basis a modest sequential increase in net interest income and net interest margin is anticipated. BNY Mellon is slated to release results before the market opens. (Read more: BNY Mellon Q1 Earnings: What's in Store for the Stock? )

BB&T Corporation (BBT) is likely to beat the Zacks Consensus Estimate this time around. Modest improvement in fee income, stable non-interest expenses and cost synergies from the acquisitions closed in 2015 are expected to propel growth. However, higher provisions can be an undermining factor. The bank is scheduled to report results before the opening bell. (Read more: BB&T Q1 Earnings: Will a Beat Drive the Stock Up? )

Fifth Third Bancorp (FITB) is slated to announce results before the opening bell. The company has a Zacks Rank #4 (Sell) with an"> Earnings ESP of 0.00%, making it difficult to conclusively predict an earnings beat this quarter. The company is anticipated to record lower net interest income while margin is likely to increase 2 to 3 basis points.

However, total fee income is not expected to reflect notable growth; rather it may be in line with first-quarter 2015 levels. Moreover, expenses are expected to trend higher in the quarter. Notably, the quarter might record continued reserve build and increased credit costs related to its energy portfolio. (Read more: Will Cost Pressure Hurt Fifth Third Q1 Earnings? )

KeyCorp. (KEY), with a Zacks Rank #4 and an Earnings ESP of 0.00%, is also less likely to beat the Zacks Consensus Estimate in the first quarter. Provisions are expected to continue to weigh on the company’s financials.

On the positive side, expenses are likely to decline substantially on a sequential basis owing to the company’s streamlining of operations, diversifying of products and exiting from weak businesses. Additionally, growth in loans is likely to result in higher net interest income. Further, elevated investment banking and debt placement fees, as well as card and payments income are expected to increase overall revenues. (Read more: KeyCorp Q1 Earnings Preview: Will it Disappoint? )

With major banks facing tough industry challenges, irrespective of an earnings beat or miss, investors should focus on the companies’ fundamentals and check later on our full write-up on earnings releases of these stocks.

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BANK OF NY MELL (BK): Free Stock Analysis Report
BB&T CORP (BBT): Free Stock Analysis Report
FIFTH THIRD BK (FITB): Free Stock Analysis Report
KEYCORP NEW (KEY): Free Stock Analysis Report
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