@D1ane’s view matches mine most closely. Strong headline profits are encouraging, but for banks I care more about what remains after credit losses, provisions and operating costs are accounted for.
NIM can benefit from the rate environment, but that advantage can fade. Likewise, Berkshire trimming BAC is worth watching, but I would not treat another investor’s positioning as sufficient reason to change my own thesis.
I would become more bullish if banks show resilient loan quality, controlled expenses and sustainable earnings growth without relying heavily on favourable rates. Conversely, a clear rise in delinquencies and credit losses would concern me even if headline earnings continue beating estimates.
For me, asset quality and sustainable profitability beat the headline number.
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