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U.S. regional banks’ profits for the third quarter beat Wall Street expectations as investment banking fees surged from a resurgence in deals, Reuters reports.
Underwriting and M&A activity both picked up pace, taking advantage of a stock market rally and leaning on a combination of economic resilience and hopes of more cuts in interest rates this year by the Federal Reserve.
The results highlight the growing relevance to investment banking to regional players.
While such services have previously been largely a domain of Wall Street giants such as JPMorgan Chase, Goldman Sachs and Morgan Stanley, regional banks have carved a niche among middle-market firms.
Gains in investment banking are helping the regional lenders soften the blow from higher deposit costs stemming from paying more interest to prevent customers from shifting to alternatives like money market funds.
