Several banks at Morgan Stanley's financialsconference—including Citizens Financial Group and Fifth ThirdBancorp—said that corporate borrowers are becoming more cautiousdue to uncertainty about trade and interest rates, along with“overall economic unease.”

That may “suggest future pressure on loan growth,” MorganStanley analyst Ken Zerbe wrote in a note on midcap bank takeawaysfrom his firm's event, which was held this week. He added thatexecutives were “quick to point out” that commercial clients'concern isn't yet resulting in weak loan growth and that creditquality is still strong.

Other key takeaways: Banks are hedging their interest rateexposure, but it may be too late to help much. Recession isn'tenough of a risk factor to deter banks from continuing buybacks.And New York legislation around rent-regulated apartments poses a“meaningful headwind” for New York Community Bancorp (NYCB) andSignature Bank.

At the conference, NYCB and Signature Bank executives said thenew rent legislation may lead to a “sizable decline” in commercialreal estate property values, he said. Morgan Stanley fears loangrowth may slow “materially” and cut earnings-per-share estimatesfor NYCB on lower prepay income.

Comerica Inc., on the other hand, “surprised to the upside” withstronger-than-expected loan growth so far in the second quarter, hesaid. Other analysts had flagged slides released ahead ofComerica's presentation, saying they showed better-than-expectedloan and deposit growth, though those positives may be offset byother factors, including soft net interest margin.

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