Quarterly earnings reports from major U.S. banks were released on July 12, revealing mixed results that had a significant impact on bank stocks. JP Morgan Chase, Wells Fargo, and Citigroup all reported their quarterly earnings, giving insight into the overall health of the U.S. banking industry. While JP Morgan experienced a surge in net income and revenue, several key metrics fell short of expectations. Despite this, the bank’s overall performance was impressive, leading to a rally in its stock earlier this year. Wells Fargo saw a slight drop in net income but managed to exceed expectations for revenue. However, net interest income declined and fell below market forecasts. Citigroup delivered better-than-expected results for revenue and profit, but concerns arose over a modest decline in net interest income and higher-than-expected expenses.
JP Morgan Chase, the largest bank in the U.S., reported a net income increase of 25 percent compared to the previous year, reaching $18.15 billion. This marked the highest quarterly profit in the history of U.S. banking. The bank also exceeded revenue expectations, with a 20 percent rise to $50.2 billion. These impressive figures showcased JP Morgan’s strength in the market. However, there were areas where the bank fell short. Net income interest only rose by 4 percent to $22.7 billion, lower than the expected 6.5 percent increase. Additionally, JP Morgan’s guidance for its 2024 interest income came in slightly below market forecasts at $91 billion. The bank also took provisions for credit losses amounting to $3.05 billion, the highest level since the onset of the pandemic. As a result, JP Morgan’s stock experienced a decline of around 3 percent after the release of the report.
Wells Fargo’s second-quarter report revealed a slight decrease in net income, reaching $4.9 million, a drop of approximately 1 percent from the previous year. However, the bank managed to exceed expectations for revenue, which ticked up slightly to $20.69 billion. Market expectations predicted a decline of 1.2 percent. Net interest income, a crucial measure of lending profit, declined by 9 percent to $11.92 billion compared to the previous year. This figure fell below market expectations of $12.12 billion. Despite the decline in net income and net interest income, Wells Fargo’s stock had experienced a rise of around 22 percent earlier in the year. However, following the release of the earnings report, the stock suffered a decline of approximately 6.7 percent.
Citigroup’s second-quarter results generally surpassed expectations for both revenue and profit. The bank’s revenue increased by 4 percent to $20.1 billion, surpassing analysts’ expectations of $20.14 billion. Net income rose by 10 percent from the previous year to $3.22 billion, exceeding expectations of $2.7 billion. However, concerns arose over the bank’s net interest income, which saw a 1 percent decline to $13.49 billion compared to $13.9 billion a year ago. This decrease was primarily driven by lower revenue from a net investment in Argentina. Citigroup also anticipated a modest decline in full-year net interest income, excluding markets. The bank’s stock experienced a decline of around 1.4 percent following the release of its earnings report.
In conclusion, major U.S. banks reported mixed results in their quarterly earnings reports, resulting in fluctuations in bank stocks. While JP Morgan Chase achieved record-breaking profits and exceeded revenue expectations, certain metrics fell short. Wells Fargo saw a slight drop in net income but managed to exceed revenue expectations. However, net interest income declined and fell below market forecasts. Citigroup delivered better-than-expected results for revenue and profit but faced concerns over a decline in net interest income and higher expenses. These earnings reports provide valuable insights into the health of the U.S. banking industry and the performance of major banks in the market.
