Recent financial results and proposed new rules for big banks in the U.S. highlight the earnings challenges that banks face, Fitch Ratings says in a new report.

The rating agency says that the long-awaited set of rules, which were released earlier this week by the U.S. Federal Reserve Board, aim to better protect banks against failure should another financial crisis arise. “We believe that, while the majority of the proposal contains no surprises, regulatory reform remains a challenge for banks,” it says.

The proposed rules will apply to banks with more than US$50 billion of consolidated assets, and non-financial firms deemed “systemically important” by the Financial Stability Oversight Council. They would impose enhanced capital and liquidity requirements, require stress tests, impose a risk-based capital surcharge of between 1% and 2.5%, and limit credit exposure to single counterparties.

In terms of the capital surcharges, Fitch notes that the Fed proposal did not include specific requirements as it’s waiting for the Basel Committee on Banking Supervision to release its global buffer requirements. Nevertheless, it says that the excess capital requirements “will be broadly manageable by U.S. banks”.

In a separate report, Fitch also says it sees increasing signs of weakness in U.S. banks’ results. The rating agency says that while the banks’ third quarter results appear to be in line with expectations, “core earnings quality is meager at best”. It notes that data gathered for the top six U.S. banks shows large gains mainly from debt value adjustments and counterparty value adjustments.

Additionally, it says that asset quality trends appeared to plateau in the quarter, which Fitch believes could signal that banks are near an end to the low provision expense and/or reserve releases, which have also supported earnings through most of 2011.

Looking ahead, Fitch says it believes provisions “could actually edge up again if housing weakness remains pronounced and economic conditions weaken”.

Moreover, in the low interest rate environment, margin pressures are expected to continue, Fitch says. It predicts that banks will be challenged to find an offset given that industry-wide deposit pricing is already very low. And, it observes that banks are beginning to assume incremental credit risk in their securities portfolio in an effort to boost revenues.