SOURCE: Five Star Equities

Five Star Equities

January 30, 2012 08:20 ET

Low Interest Rate Environment Pressures Margins at Regions Financial and Fifth Third Bancorp

Five Star Equities Provides Stock Research on Regions Financial & Fifth Third Bancorp

NEW YORK, NY--(Marketwire - Jan 30, 2012) - Regional banks such as Regions Financial and Fifth Third Bancorp -- already struggling to boost revenues due to the low interest rate environment -- are likely to expect further pressure on their margins after The Federal Open Market Committee said that economic conditions are likely to warrant "exceptionally low levels for the federal funds rate at least through late 2014." According to a recent article from Reuters, commercial and industrial lending has been the sole bright spot in an otherwise lackluster loan environment, pointing to an improving economy. Five Star Equities examines investing opportunities in the Regional Banking industry and provides equity research on Regions Financial Corporation (NYSE: RF) and Fifth Third Bancorp (NASDAQ: FITB). Access to the full company reports can be found at:

www.fivestarequities.com/RF

www.fivestarequities.com/FITB

The Fed gave a bleak outlook for the economy, prompting speculation that it was preparing the way for QE3, Bloomberg reports. Federal Reserve Chairman Ben Bernanke said the Federal Reserve would not hesitate to take further action if the country continues to "have this unsatisfactory situation."

According to a recent article from Bloomberg, the decision could hurt bank profits as they struggle to find loans or securities with yields high enough to support their net interest margins, a gauge of profitability that measures the difference between the cost of funds and what they earn on assets.

Five Star Equities releases regular market updates on the Regional Banking industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.fivestarequities.com and get exclusive access to our numerous stock reports and industry newsletters.

Richard Staite, a London-based analyst with Atlantic Equities LLC argues that banks may be able to avoid some of the negative impact of low rates if the Fed's policy fuels economic growth and lending picks up. "The best thing the Fed can do is promote economic growth, even if that requires a sustained period of low interest rates," Staite told Bloomberg. "Loan growth will be the most important factor to helping banks offset the negative impact of low rates."

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