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Business trends for 2006
Banking
Economy a friend, rate squeeze a foe
By HELEN HUNTLEY
Published January 8, 2006
Interest rates are a hot topic for Florida bankers, who are getting their profits squeezed as short-term rates rise while long-term rates stay flat. The trend is exacerbated by savvy savers moving their money into higher-yielding CDs, ramping up the banks' cost of deposits.
A key question for the new year is how long the Federal Reserve Board's cycle of rate hikes will continue once chairman Alan Greenspan steps down at the end of this month. Ben Bernanke is expected to be confirmed by the Senate to take his place.
Florida banks will benefit from the state's robust economy, as signs point to continuing strong job growth, even though the housing boom is expected to cool.
Expansion-minded banks such as BB&T will be looking for growth opportunities in the state, although high stock valuations may cause the pace of acquisitions to slow this year.
[Last modified January 8, 2006, 11:25:45]
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