Bank of America Corp. and Citigroup Inc. are among lenders thatmay find it more difficult to boost profits and capital after theFederal Reserve pledged to keep its benchmark interest rate lowuntil at least late 2014.

“This hurts the banks, I don't think there's any question aboutthat,” said Ralph Cole, a senior vice president of research atFerguson Wellman Inc. in Portland, Oregon, which manages $2.9billion. “Their cost of funds stays low but it makes it harder toearn a return.”

The Federal Open Market Committee said yesterday that economicconditions are likely to warrant “exceptionally low levels for thefederal funds rate at least through late 2014.” The policy may hurtlenders' profits as they struggle to find loans or securities withyields high enough to support their net interest margins, a gaugeof profitability that measures the difference between the cost offunds and what they earn on assets.