Banking Earnings Recap

We kick off another earnings season with the big banks: JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC). JPMorgan beat Street estimates handily on the top and bottom line, with its $1.88B in provision for credit losses below analyst consensus. Trading revenue fell 5% but was made up for by fixed-income and equities. CEO Jamie Dimon said the bank is on alert to “a number of significant uncertain forces,” although the U.S. economy and the bank are still strong.

Citigroup fared a little worse than JPMorgan, posting a year-over-year revenue decline despite beating estimates because of selling an overseas business in 2023. Citigroup has laid off 7,000 employees in a broader overhaul intended to simplify management and technology infrastructure, taking a $225 million restructuring charge and $258 million in repositioning costs this quarter. However, the company says it has finished its transformation. Reversing JPMorgan, trading revenue rose and fixed-income fell.

And Wells Fargo beat estimates but saw a net interest income decline of 8% year-over-year due to higher interest rates and customers moving into higher-yielding deposit products. CEO Charlie Scharf says that the bank continues to “improve and diversify” its financial performance. Net charge-offs were $1.16 billion, with $938 million in provision for credit losses. While consumer, small & business banking revenue fell 4%, credit card revenue rose 6%, driven by higher loan balances.

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