Forecasting the performance of the US banking industry

Significant challenges expected over the next several years

The outlook for banks is looking up, but lingering questions about the economic recovery and expectations of a low-rate environment present significant challenges over the next several years.

Deloitte forecasts that US commercial banks could experience up to $254 billion of net loan losses between 2020 and 2022. Our latest estimate is also lower than our previous forecasts, mainly due to improving economic prospects. This is also significantly less than the cumulative net loan losses during the Great Financial Crisis (GFC). Commercial and consumer loans should take the biggest hit. On the revenue side, loan growth should remain muted, and the low-rate environment will likely continue to suppress net interest income. The banking industry is expected to continue implementing cost reduction strategies and refining its business models to drive growth.

Navigate the future of US banking industry performance by exploring our updates below.