By Senad Karaahmetovic
Odeon Capital Group analysts downgraded Bank of America (NYSE:BAC) shares to Hold from Buy, citing several reasons.
They believe BAC could see its loan growth slow down while loan losses are expected to increase.
“The company is a strong consumer lender. Yet it is likely that home mortgage growth will weaken. The industry data is not good at the moment,” they said in a note.
Other reasons behind the downgrade include:
• Despite the possible recession, interest rates are not expected to fall;
• This means that the bank must now pay much higher rates for deposits;
• Its net interest margin may decline;
• Its credit income is expected to be flat to down;
• Its capital markets activity could weaken;
• Its expenses are expected to be flat to slightly higher.
Bank of America shares trade modestly lower today.