As the economy prepares for a looming recession, many banks are bracing for heavy loan losses. Several of the largest banks in the world, such as JPMorgan Chase, Bank of America, and Wells Fargo, have already reported huge profit declines in the first quarter of this year, ranging from 40% to 90%. That's primarily a result of having to set aside billions of dollars to cover loan losses.
Although an economic downturn will hit the banking sector particularly hard, there are some banks that may actually do well during an economic downturn, at least compared to their peers. These banks are less reliant on revenue from interest income from loans and more so on revenue from fees from investment management, investment servicing, and trading activity resulting from heightened volatility that creates more transactions. Here are four larger bank stocks that could outperform the banking sector during this upcoming stretch.
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