Fitch: Banks' Mortgage-Driven Momentum to Slow

The first quarter financial improvements at U.S. banks, in large part driven by mortgage origination activity, will be difficult to maintain as credit losses continue to rise, a report from Fitch Ratings, New York declared. The increases in what Fitch called "market-driven revenues" that come from mortgage originations and fixed income trading are not likely to persist. "It appears that the industry is poised for another strong quarter in mortgage originations, although revenues from this business are presently expected to slow, possibly materially, in the second half of 2009," Fitch said. The rating agency added banks are likely to see continued increases in loan delinquencies, non-performing assets and net charge-offs for several quarters to come because of the uncertain economy.