Earnings season for financial services officially kicked off this morning, with three of the top four banks reporting earnings.
Let’s look at JPMorgan first. By most measures, they crushed it. The country’s largest bank reported $13.42 billion in profit on $41.93 billion in revenue – that is for the first quarter folks, not a year. Did anyone ever tell you that banking is highly profitable?
Wells Fargo also reported solid earnings. Profit declined a little but it was still $4.62 billion on revenue of $20.86 billion. Both earnings and revenue were above Wall Street analysts’ expectations.
Citi also topped analysts’ estimates with $3.37 billion in profit on revenue of $21.10 billion, but both these numbers were down from the same period last year.
One of the themes across the three earnings reports was the impact of higher interest rates. Now that rates have been high for a while, consumers are moving money away from accounts that pay little interest into higher-yielding CDs or savings accounts.
This has a direct impact on the important metric of Net Interest Income (NII). Banks expect NII to remain flat or decline for the rest of 2024.
Bank of America reports on Tuesday.
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