Is bog-standard banking about to get sexy? In the near term, staring in the face of second-quarter results, the answer is decidedly not. Credit losses are set to rise at US banks. Some loan categories, such as commercial real estate, will deteriorate further into the latter half of the year. As the crisis dissipates, however, banks may find themselves rebuilding their business on a more stable foundation.

RBC Capital Markets expects the industry’s net interest margin to rise by 50 to 75 basis points over the next two years, as problem assets decline. That key measure of profitability has fallen from 4.4 per cent in 1992 to 3.4 per cent at the end of last year – and a rise of the magnitude forecast by RBC would be good for up to $75bn in additional revenues. This is partly just macroeconomics and cyclical stabilisers at work. As the Federal Reserve drove short-term rates to zero, a steepening yield curve has made borrowing short and lending long much more profitable. But the banks should also benefit from a structural boost to margins.