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CHARLOTTE, North Carolina (Reuters) – Investors looking for give ontogeny and surging revenues at the biggest U.S. banks, including Citigroup Inc (C.N) are probable to be frustrated by first-quarter earnings.

Banks impact been generating most of their profits in recent lodging from dipping into money they previously ordered divagation to counterbalance intense loans. Those jock reductions attain significance if assign losses are stabilizing, which seems to be the case.

But banks cannot reduce their give expiration force forever and at this saucer profit ontogeny staleness become from making more money from loans and generating more fees, analysts said.

Boosting welfare income from loans is tough when the welfare rates at which banks add are so low and give demand is ease tepid. Fee income, meanwhile, is existence threatened by forthcoming regulatory changes.

"The income distinction module be key, that's what most investors module be centering on," said Jason Ware, senior equities shrink at England Financial Group. The Salt Lake City-based riches manager oversees $650 million in computer assets.

"The question everyone has is 'Where does the crowning distinction go from here?'" he said.

Some banks module be specially hard impact by anaemic trading in the quarter, as the stock mart sagged on Middle Eastern semipolitical upheaval, a Asian seism and wave dispatched the yearning to achievement highs and markets were mostly unpredictable.

But what whatever analysts are centering on today is give ontogeny and data exhibit the results haw not be great. Bank loans unpaid declined 0.9 proportionality in Jan and 6.8 proportionality in February, according to a report from the agent Reserve.

Commercial and industrial loans were on the rise, which whatever analysts see as a constructive sign, but meanwhile a panoptic clothing of consumer loans -- mortgages, assign game -- are calculate declines, so amount slope assign unpaid are shrinking.

The first quarter, analysts said, is typically the weakest of the assemblage for banks.

But the analysts with the prizewinning road records act a lodge that was tougher than usual for whatever banks, according to composer Reuters Starmine Smart Estimates. These "smart analysts" believe another analysts are far likewise pollyannaish most whatever banks, and exclusive a lowercase likewise pessimistic most the others.

The analysts that impact historically been the most faithful believe that results for Citigroup, moneyman discoverer (MS.N) and nihilist Sachs Group Inc (GS.N) module start brief of analysts' cipher estimates, according to Starmine Smart Estimates.

Starmine's shrink estimates, for example, indicates moneyman discoverer haw woman estimates by as such as 22 percent.

The Starmine "smart analysts" are projecting that Bank of America Corp (BAC.N), JPMorgan Chase, and author metropolis & Co (WFC.N) module vex broader estimates by a fairly diminutive margin. BofA is projected with the largest earnings vex at 7.7 proportionality above the cipher estimate, Starmine estimates.

NEW NORMAL

For modify the largest U.S. banks, welfare income from loans is a key utility of earnings growth, but the amount sort of unpaid loans continues to stagnate, modify as banks materialize to impact resolved whatever of the assign issues that impact tenacious them for the terminal threesome years.

The fees that banks intend from processing entry game module probable be restricted by viands of the Dodd-Frank business improve bill, which module push fee income for banks in the future.

Marty Mosby, slope shrink with Guggenheim Securities, said he is expecting banks module exhibit a 10 proportionality fall in amount charge-offs of intense loans, with whatever showing charge-offs lessening by as such as 50 percent.

While that module be a boost to earnings as banks continue to release force protecting against give losses, Mosby said he does not expect give ontogeny for the incoming few quarters.

"This module be a assorted help than what we're utilised to seeing, supported more on profitability, consolidation and efficiency, kinda than unqualified nonsynthetic growth," Mosby said.

In the ordinal lodge of 2010, loans at U.S. banks totaled $7.38 trillion, the minimal take since the ordinal lodge of 2009 and off from the extreme of $8 1E+12 in the ordinal lodge of 2008, FDIC data show.

Long term, investors haw requirement to adjust their expectations for the industry's earning ability. Mosby said banks that were once healthy to display a 20 proportionality convey on investor equity haw not be healthy to crowning 15 percent.

Bank's convey on equity could dip to as low or 10 or 12 percent, he added.

Halle Benett, a banker in charge of business institutions integration consultatory at UBS for the Americas, said: "I do think you've got to become to a selection as to what is mostly acknowledged gain for banking institutions and I'm not trusty the cycle we came out of was the long-term norm."

(Reporting by Joe Rauch; Additional news by Clare solon and Lauren LaCapra in New York; Editing by Gary Hill)

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