Banks eye more cost cuts amid global growth concerns
By Olivia Oran
(Reuters) - Goldman Sachs Group Inc (GS.N: Quote) and other U.S. banks are looking at ways to slash expenses further this year as market turmoil, declining oil prices and concerns about Germany's Deutsche Bank AG (DBKGn.DE: Quote) have sent the sector's shares down sharply.
"We can absolutely do a lot more on the cost side if we have to, especially now, when you have to deliver a return," Goldman Chief Executive Officer Lloyd Blankfein said on Tuesday at the Credit Suisse financial services forum in Miami.
"We take a particular and energetic look at continued cost cuts when revenues are stalled," he said. " ... Necessity is the mother of invention."
U.S. Bancorp Chief Financial Officer Kathy Rogers echoed Blankfein's comments at a separate panel, saying her bank would keep cutting costs this year. She cited a smaller chance that interest rates would rise, which would have indicated a stronger economy and more revenue for the bank.
BB&T Corp (BBT.N: Quote) CEO Kelly King said the bank has rejected broad-based layoffs so far and remains focused on managing expenses in a way that will not hurt business in the long-term.
"Cutting expenses with a butcher's knife and a bad attitude is not going to produce good results," he said.
As executives were speaking at the conference, Deutsche Bank shares hit a record low, following their 9.5 percent plunge on Monday.
Although the bank has said it has sufficient reserves, investors have worried that it will not be able to repay some bonds that are coming due. The bonds, called AT1 securities, convert into equity in times of market stress. Continued...