JPMorgan, Citigroup and Wells Fargo finished the quarter better than expected – Kommersant

On Thursday, April 12, three of the four representatives of the “Big Four” of the American banking sector – JPMorgan Chase, Citigroup and Wells Fargo – published their financial statements for the first quarter of the year. And their performance overall turned out to be better than analysts had predicted.

The American banking sector continues to benefit from high interest rates. The Federal Reserve has repeatedly postponed their reduction, since the inflation rate in the country will not drop to the target value of 2%. And by the end of March, inflation was completely accelerated in annual terms from 3.2% to 3.5%. Interest rates in the US remain at 5.25–5.5%, and their reduction is not expected until the fall.

Citigroup reported reported quarterly revenue of $21.1 billion, and the bank’s net profit amounted to $3.4 billion, or $1.58 per share. Both figures exceeded expectations of analysts surveyed by Bloomberg. They predicted that Citigroup’s profit would be $1.23 per share and revenue would be $20.4 billion. And this was after the bank presented the weakest quarterly reporting over the past 15 years and announced its intention to lay off about 20 thousand employees in order to cut costs.

JPMorgan Chase net profit for the first quarter grew by 6% to $13.42 billion, or $4.44 per share. As for revenue, it reached $41.93 billion, which is 9% better than last year. JPMorgan’s reporting also turned out to be better than expected. Analysts on average had expected earnings of $4.17 per share and revenue of $41.69 billion.

At the same time, JPMorgan management noted during the presentation of the results that the bank’s net interest income (the difference between profit on loans and payments on deposits) is declining as clients increasingly transfer their funds to accounts with higher interest rates. Therefore, at the end of the year, the bank predicts zero growth in interest income. Following this announcement, JPMorgan shares fall more than 5%.

Finally, Wells Fargo was the only one of the three that reported earnings for the quarter decreased – by 7%, to $4.6 billion, or $1.26 per share. As in the case of JPMorgan, this is also associated with a drop in net interest income – by 8%. The bank’s revenue remained virtually unchanged compared to last year, increasing from $20.7 billion to $20.86 billion.

However, both of Wells Fargo’s key financial indicators were better than expected. Analysts surveyed by LSEG on average expected the bank to earn a profit of $1.11 per share, while betting on revenue falling to $20.2 billion.

Kirill Sarkhanyants