08:11 AM EDT, 09/27/2024 (MT Newswires) -- US banks "look strong" over the next 12 to 18 months, RBC Capital Markets said in its Q3 business preview Friday.

"Bank stock performance [year to date] 2024 relative to the broader market has been strong," RBC said, noting that the top 20 bank stocks trade on average at 1.2 times book value, 1.7x tangible book value, and 10.6x 2025 estimated earnings per share.

The analysts also said they expect Q3 median core EPS to decrease 5.8% from Q2 and 7% year over year as well as lower net total revenues, higher provisions and higher noninterest expense, adding that the decline will be due to lower net interest income and higher loan loss provisions.

RBC also said that investors will likely continue to monitor low FICO score consumer loans, commercial real estate mortgages, commercial and industrial loans, leveraged lending, and loans to non-depository financial institutions "as areas with elevated credit risk."

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