EasyEquities Blog

Financial Sector: Who’s Set for Margin Growth and Who’s Not?

Written by Thulisa Shandu | Jul 23, 2024 5:00:00 AM

The #EasyAssetManagement team reports that the financial sector is set for a slow margin recovery with a low point expected in Q2 2024, and a full return to pre-pandemic levels won’t happen until early 2025, with some companies expected to perform better than others.



The financial sector is projected to experience a gradual net margin recovery, with a potential trough in the second quarter of the year. While consensus estimates indicate a sector-wide net margin of 18% for the quarter, this figure remains notably below pre-pandemic peaks. The consumer finance and banking subsectors have been particularly impacted, with margins significantly lower than their pre-2020 highs.

A full recovery to pre-pandemic margin levels is not anticipated until early 2025.

However, there is potential for variation within the sector, with certain companies like KKR, KeyCorp, Goldman Sachs, Allstate, and Schwab expected to demonstrate stronger margin expansion compared to others.

Conversely, PayPal, Arch Capital, JPMorgan Chase, Nasdaq, and CME may experience margin contraction.


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