Truist reduces 2025 revenue guidance amid market volatility

Scott McIntyre/Bloomberg

Truist Financial lowered its revenue expectations for the year, citing a material slowdown in investment banking and capital markets activity and the anticipation of less net interest income.

Chairman and CEO Bill Rogers told analysts Thursday that market volatility and economic uncertainty were key factors in the Charlotte, North Carolina-based company's revised outlook. The bank now anticipates that its revenue will grow by 1.5% to 2.5% year over year, compared with a more optimistic 3% to 3.5% growth projection that the company shared with investors at the beginning of the year.

Rogers also said Truist is taking advantage of the tariffs-induced market turmoil to buy back some of its common shares. So far in the second quarter, the capital-rich company has repurchased $500 million of shares, and it plans to buy back another $250 million before the end of June.

"We saw an opportunity with the price of our shares, utilizing this capital position to invest in Truist," Rogers said during the bank's first-quarter earnings call. "And we like investing in Truist."

Truist was one of several regional banks that reduced their 2025 guidance on Thursday — in some cases because of the threat of a tariff-induced economic slowdown — though certain other banks stood pat or made upward revisions.

Regions Financial in Birmingham, Alabama, and Fifth Third Bancorp in Cincinnati both lowered their fee income expectations for the year. Regions also lowered its loan growth forecast, while Fifth Third raised theirs.

Huntington Bancshares stood by most of its 2025 guidance, including its outlook for fee income, and it revised its forecast for net interest income upward. The Columbus, Ohio-based company is now calling for net interest income growth in the range of 5% to 7%, up from the 4% to 6% it predicted in January.

Texas Capital Bancshares in Dallas maintained its fee income forecast for the year, but narrowed its revenue projections to the higher end of what the company had laid out in January.

At Truist, the full-year revenue revision is a reflection of changing dynamics around interest rates and the investment banking business. Investment banking and trading income is now expected to be flat year over year, while net interest income is projected to be slightly lower due to the shifting yield curve and the medium-term rate outlook, Rogers said on the call.

The latest forecast for the yield curve delays Truist's ability to lower its deposit costs and reduces the benefit of fixed-rate asset repricing, Chief Financial Officer Mike Maguire noted.

Truist also made a positive revision to its full-year expense guidance, saying it now projects expenses will grow by about 1% versus the 1.5% it was expecting in January. The change reflects the anticipation of lower incentive payments to employees and other ongoing cost-savings initiatives, Maguire said.

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In the first quarter, Truist reported net income of $1.3 billion, up more than 5% year over year.

Earnings per share were 87 cents, matching the estimates of analysts polled by S&P Capital IQ.

Despite lowering its revenue projections, the $535.9 billion-asset company said Thursday that it still expects its revenues to outpace spending this year. Achieving positive operating leverage has been a perennial focus for Truist executives since the 2019 merger that created the company.

Notably, Truist hasn't achieved full-year positive operating leverage since 2022.

While the bank is expecting to spend less this year, it will keep investing in talent and technology, Rogers said. That spending includes hiring in certain growth markets and improving digital capabilities.

In March, Truist said it had hired a four-person middle-market banking team to focus on New Jersey. The new team joined Truist from Citizens Financial Group.

The bank has identified New Jersey, Pennsylvania and Texas as existing but undertapped markets where it has an opportunity to do more business and take more market share.