Banks are painting a relatively rosy picture of the economy in their earnings reports. Profits are rising. Lending portfolios are healing. Mergers and acquisitions are picking up. Banks are even upping dividends to investors.
But after bank stocks have rallied strongly for months amid Federal Reserve easy money, investors may not be excited by the actual results. JPMorgan Chase (JPM) and Wells Fargo (WFC) kicked off bank results Friday. JPMorgan and Wells Fargo earnings topped forecasts, but in large part on cost-cuts and lower loan-loss reserves. Both reported lower revenue amid lackluster lending activity. JPMorgan, the nation's No. 1 bank by assets, slipped 0.6% Friday. Wells Fargo, the top U.S. mortgage lender, dipped 0.8% on the stock market Friday.
Financial heavyweights get more at-bats this week with Goldman Sachs (GS), Bank of America (BAC), Citigroup (C), and Morgan Stanley (MS) on deck. Analysts think the financial sector collectively will show a 10.6% first-quarter earnings hike, according to Thomson Reuters data. That compares with just a 1.1% increase for the broader S&P 500. No. 3 U.S. bank Citi reports Monday morning. Analysts expect earnings per share to climb 7.2% to $1.19, with revenue up 3.6% to $20.11 billion. Its shares were up 4.1% for the week.
On Tuesday morning, investment bank giant Goldman reports. The consensus estimate is for EPS to decline 2% to $3.84. Analysts expect revenue to decline 3.5% to $9.6 billion. Its shares were up 3.8%.
Bank of America reports Wednesday morning. Analysts expect EPS of 22 cents a share vs. 3 cents a year earlier, according to Thomson Reuters. Analysts see revenue climbing 5.1% to $23.41 billion. BofA climbed 1.7% last week.
Morgan Stanley reports Thursday morning. Analysts expect earnings of 57 cents per share, from an adjusted loss of 6 cents per share a year ago. Revenue is expected to pop 20.4% to $8.35 billion. Its shares climbed 1.2% through the week.
Also up this
Ya'll might want to take off those Rosy colored glasses and take a look at JPM's and WFC's reports.
Banking margins are way down. Investment banking was even slow.
It didn't bode well for C whose margins were already low and investment banking for all intents and purposes was sold off at a loss, as you can see by the advance report provide by Investor Relations.....
Income Statement Details
$17,035 Interest revenue
$4,628 Interest expense
$12,407 Net interest revenue
$3,232 Commissions and fees
$200 Principal transactions
$1,003 Administrative and other fiduciary fees
$813 Realized gains (losses) on investments
-$150 Other-than temporary impairment losses on investments and other assets (1)
$619 Insurance premiums
$301 Other revenue (2)
$6,018 Total non-interest revenues
$18,425 Total revenues, net of interest expense
Provisions for Credit Losses and for Benefits and Claims
$3,644 Net credit losses
-$500 Credit reserve build / (release)
$3,144 Provision for loan losses
$245 Policyholder benefits and claims
-$7 Provision for unfunded lending commitments
$3,382 Total provisions for credit losses and for benefits and claims
$6,301 Compensation and benefits
$821 Premises and Equipment
$1,479 Technology / communication expense
$556 Advertising and marketing expense
$3,474 Other operating
$12,631 Total operating expenses
Income from Continuing Operations before
$2,412 Income Taxes
$7 Provision (benefits) for income taxes
$2,405 Income from Continuing Operations
Discontinued Operations (3)
#$%$ Income (Loss) from Discontinued Operations
$0 Gain (Loss) on Sale
-$18 Provision (benefits) for income taxes
-$37 Income (Loss) from Discontinued Operations, net of taxes
$2,368 Net Income before Noncontrolling Interests
$55 Net Income attributable to noncontrolling interests
$2,313 Citigroup's Net Income
Looking for at least a one dollar + increase this week. Slow but steady. Going to $50.00 plus
Before the end of the year. Employees must be pleased with new management and back to old
Fashion banking and less risk taking. IMHO.