Banks: Second-Quarter Earnings Results Mixed

(MONEY Magazine) – Bank of America, which recently announced plans to acquire leading credit-card issuer MBNA, reported 12% earnings gains in the second quarter. Meanwhile, earnings declined 4% at MBNA and 7% at Citigroup. Banks may face a squeeze on profit margins in the coming quarters. Their borrowing costs have risen as short-term interest rates have gone up. The long-term rates that banks, in turn, charge their borrowers haven't budged.


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NOTES: As of July 14. P/E ratios are based on projected 2005 earnings. Earnings growth is compound annual rate projected for five years by analysts covering the stock. SOURCES: Thomson/Baseline, Standard & Poor's.