It seems America’s big banks are benefitting from higher interest rates. U.S. bank earnings kicked off Friday with results from the country’s biggest lender, JPMorgan. Its revenue jumped to a record $41.3 billion, thanks to higher rates and its acquisition of failed midsize lender First Republic in March. Wells Fargo also earned more than expectedin the second quarter and lifted its guidance for the year. “The U.S. economy continues to perform better than many had expected,” said CEO Charlie Scharf.
- Citi announced an 11% jump in revenue from U.S. personal banking in the second quarter, “reaping the gains as customers borrow more,” said Bloomberg.
- BlackRock, the world’s biggest asset manager, reported net income of $1.4 billion, up 27% from a year earlier.
- Heavyweights Morgan Stanley and Bank of America report earnings on Tuesday, while Goldman Sachs — which has lowered expectations about its results — reports on Wednesday. Regional banks also begin reporting earnings next week.
- JPMorgan now employs more than 300,000 people, its headcount up 8% from a year ago, Bloomberg reports.
By Cate Chapman, Editor at LinkedIn News
Citigroup posts better-than-expected earnings and revenue
- Citigroup reported second-quarter earnings and revenue that topped expectations.
- Despite the beat, Citi’s revenue fell 1% from a year ago as the decline in markets and investment banking businesses weighed on its results.
- “Amid a challenging macroeconomic backdrop, we continued to see the benefits of our diversified business model and strong balance sheet,” CEO Jane Fraser said in a statement.
Citigroup on Friday reported second-quarter earnings and revenue that topped expectations.
Despite the beat, Citi’s revenue fell 1% from a year ago as the decline in markets and investment banking businesses weighed on its results. Citi said the uncertain macroenvironment and low volatility impacted client activity and market performance.
“Amid a challenging macroeconomic backdrop, we continued to see the benefits of our diversified business model and strong balance sheet,” CEO Jane Fraser said in a statement.
Here’s how the New York-based lender fared in the quarter compared with what analysts polled by Refinitiv expected from the banking giant.
- Earnings per share: $1.33 vs. $1.30
- Revenue: $19.44 billion vs. $19.29 billion
Citigroup’s net income fell 36% to $2.9 billion, or $1.33 per share, from $4.5 billion, or $2.19 per share, last year, pressured by higher expenses, high cost of credit and lower revenue.
“Markets revenues were down from a strong second quarter last year, as clients stood on the sidelines starting in April while the U.S. debt limit played out,” Fraser said. “In Banking, the long-awaited rebound in Investment Banking has yet to materialize, making for a disappointing quarter.”
On the bright side, revenue from personal banking and wealth management increased 6% in the quarter to $6.4 billion driven by strong loan growth.
Citi returned a total of $2 billion to shareholders through common dividends and share buybacks in the second quarter.
Shares of Citigroup dipped 4% on Friday. The stock is up more than 1% year to date, outperforming the SPDR S&P Bank ETF (KBE), which is down about 12%.
BY: Yun Li, CNBC
