As market volatility persists market watchers eye the Federal Open Market Committee next week.
European Central Bank President Mario Draghi announced on Thursday that the Bank may have to revise the current monetary policy, which created speculation on the Street that there will be monetary stimulus as early as March.
Low interest rates are a challenge for the banking industry, but BB&T and “most of the better banks” are prepared for this scenario, Kelly King, BB&T Corp.’s CEO told CNBC in an interview on Thursday.
“We are only building one rate increase into our 2016 model, towards the later part of the year,” he told “Closing Bell.”
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The financials and health-care sector were the only sectors that were negative on the S&P 500 on Thursday. BB&T’s stock closed down more than 3 percent Thursday.
However, King considers that the recent market volatility is due to an “overreaction” in the market, and nothing has fundamentally changed.
“We’ve performed really well over the last couple weeks because we are kind of a safe haven kind of stock,” he said, adding that Thursday’s losses are due to market sentiment and “those things tend to correct over a few days.”
BB&T reported earnings on Thursday; while it missed earnings expectations from research firm Zacks Investment Research by 4 cents, it beat analysts estimates on revenue.
The research firm considers that a rise in expenses was responsible for lower earnings.
The bank, which has had recent acquisition activity told CNBC that this strategy is a part of a larger optimization plan.
“While the announced acquisitions will be about $220 billion in size, we really think we need to be $350, or $400 billion … to really optimize the returns to our shareholders,” he said.
[“source -pcworld”]
