Regions Financial profit rises on deal surge, lower rainy-day funds

Regions Financial

17/01/2025 13:11

Jan 17 (Reuters) - U.S. regional bank Regions Financial
 RF.N  reported a 38% increase in fourth-quarter profit on
Friday, driven by higher fees from advising on deals and fewer
provisions for potentially souring loans in a tough economy.
    Banks have benefited from a resurgence in dealmaking
activity, fueled by improving economic confidence and greater
political certainty. Expectations of more rate cuts and
business-friendly regulations under President-elect Donald Trump
have further boosted hopes for a continued revival in investment
banking.
    Regions Financial's capital markets income more than doubled
in the quarter, driven by higher dealmaking fees, while wealth
management income rose 7.7%.
    These gains mirror trends seen by larger rivals, benefiting
from a rebound of investment banking activity.
    Interest rate cuts are also expected to boost loan demand
and alleviate consumer stress, allowing lenders to reduce cash
reserves set aside for potential defaults.
    The bank's provision for credit losses, or the capital
lenders set aside for loans that may not be paid back, decreased
to $120 million in the quarter from $155 million in the year-ago
period.
    The Birmingham, Alabama-based lender's net interest income
(NII) - the difference between what banks pay customers on
deposits and earn as interest on loans - remained flat at $1.23
billion.
    While it forecast that NII will decline modestly in the
first quarter versus the fourth quarter, the bank expects it to
grow between 2% and 5% in 2025.
    Regions Financial's net income available to common
shareholders rose to $508 million, or 56 cents per share, in the
three months ended Dec. 31, from $367 million, or 39 cents per
share, a year earlier.
    Shares of the lender were last up 1.3% before the bell. Its
stock ended 2024 with a 21.4% gain.

 (Reporting by Prakhar Srivastava in Bengaluru; Editing by Maju
Samuel)
 ((mailto:Prakhar.srivastava2@thomsonreuters.com;))