The accounts published today by giants JPMorgan, Wells Fargo, Citigroup, have officially kicked off the quarterly earnings season in the States on Wall Street.
No positive reaction from the US stock market, which continues to deal with the trauma of theUS inflationwhich was reiterated among other things by himself number one of JPMorgan, CEO Jamie Dimon.
For JPMorgan, whose shares lost 4%, the negative news was also double: on the one hand, it was the bank itself that declared that the 2024 net interest margin could remain slightly below what Wall Street analysts expected. On the other side, Dimon does not hide his concerns about the future of the world economy.
If you want updates on US quarterlies enter your email in the box below:
By filling out this form I agree to receive information relating to the services on this page in accordance with the privacy policy.
JPMorgan: eps beats expectations, but shares down on Wall Street
JPMorgan, the first American bank by asset value led by CEO Jamie Dimon, announced that it completed the first quarter of 2024 with earnings per share of $4.4, above the $4.17 expected by analysts’ consensus.
Revenue stood at $42.55 billion, roughly in line with estimates and growing by 8% year-on-year.
However, the stock is down about 4% in premarket trading.
CEO and president Jamie Dimon commented on the numbers that emerged from the accounts for the first quarter of 2024, highlighting net profit of $13.4 billion, which rose 6% year-on-year, e the “exceptionally high” CET1 ratio, equal to 15%.
However, Dimon also pointed out the quarterly decline in NII (net interest margin), equal to -4%as expected, anticipating the continuation of the future normalization, “both for the NII and for the cost of credit”.
JPMorgan’s net interest margin, which stood in the first three months of the year at $23.1 billion, however, it grew by 11% on an annual basis.
It would be anyway the outlook on the NII, according to Wall Street analysts, the discordant note that would have triggered the sell on the stock given that, in presenting the guidance for 2024, JPMorgan said it expected a net interest margin of around $90 billion for this year: a figure practically unchanged compared to what it had said to predict earlier, and below some analysts’ forecasts.
Among these, some had in fact estimated that JPMorgan raised its full-year net interest margin guidance by $2 billion to $3 billion.
Good signs came instead with the decline in the first quarter of 2024of the provisions made by JPMorgan to cover possible future credit losses, which stood at $1.88 billion, significantly below the $2.7 billion expected by analysts’ consensus.
JPMorgan’s provisions they were also 17% lower than those of the first quarter of 2023, with the giant also releasing some reserves, rather than accumulating them as it did last year.
It should be noted that JPMorgan shares have risen about 15% since the start of 2024, significantly outperforming the sector index’s gain KBW Bank Index, equal to +3.9% in the same period.
JPMorgan: CEO Dimon’s alert on inflation and rates
Administrator Jamie Dimon showed in general caution regarding the outlook for the US economy:
“Many economic indicators continue to be favorable,” he said. “However, looking ahead, we remain alert to some significant factors of uncertainty,” which include “terrible wars and violence” and an escalation of geopolitical tensions, as well as “persistent inflationary pressures”.
Still, the effects of the rate increases launched by the Federal Reserve and other central banks remain an unknown, continued the CEO of JPMorgan, as “We have never truly experienced the full effects of quantitative tightening on this scale.”
The Wall Street giant is therefore preparing to “a wide range of potential scenarios”.
Earlier in the week, Jamie Dimon said that US interest rates could fly to 8% or even higher.
Wells Fargo: first quarter 2024 earnings down, shares up solidly YTD
Wells Fargo announced that it ended the first quarter of 2024 with net earnings of $4.619 billion, or $1.20 per share, above the $1.06 per share expected, but down from first-quarter 2023 earnings of $4.991 billion, or $.23.
Revenue of $20.86 billion compared to $20.729 billion in the first quarter of 2023, it beat expectations by $20.195 billion.
It should be noted that Wells Fargo stock is up 15.2% since the beginning of 2024, compared to +9% of the S&P 500 index and +2% of the Dow Jones.
However, the bank’s shares are falling today following the publication of the accounts, which they highlighted a net interest margin (NII) fell in the first quarter of 2024 to $12.227 billion, compared to $13.336 billion in the same period last year.
On the other hand, Wells Fargo’s non-interest income was on the rise, rising to $8.636 billion, from $7.393 billion, in the wake of the improvement in the numbers of the venture capital division, of the highest investment banking fees, fee growth in the asset management and investment management divisions, and higher turnover in the trading division.
In media, the consumer banking and lending division instead, it saw a 3% year-over-year decline to $329.7 million, down 1% from the fourth quarter of 2023.
Wells Fargo’s provisions fell to $938 millioncompared to 1,207 billion in the same period of the previous year.
Citigroup beats expectations, says CEO Jane Fraser
Citigroup announced that it reported in the first quarter of 2024 net income of $3.4 billion, or $1.58 per share, down from $4.6 billion, or $2.19 per share, in the same period a year earlier.
Revenue fell 2% to $21.1 billion.
Although in decline, Citigroup’s numbers were confirmed above analysts’ expectations, who had aimed for an EPS of $1.18 and a turnover of $20.46 billion.
However, the positive trend of Citigroup shares is short-lived.
The stock is in fact turning into negative territory.
However, the performance from the beginning of 2024 is positive, equal to one 18% jump from the beginning of 2024, which also allowed this stock to do better YTD than the trend of the S&P 500 and the Dow Jones Industrial Average.
According to the Marketwatch.com website, Citigroup CEO Jane Fraser announced that the bank completed the process of simplifying its organization last month which he communicated in September.
“The result is cleaner and simpler management, which fully aligns with our strategy, making it easier,” Fraser said.
Among the assists to Citigroup accounts, record levels of investment grade bond issues, which helped boost the Wall Street giant’s revenue by 49%.
In the wealth management divisionCitigroup also attended an increase in commissions, raising more than $22 billion in net new assets, over the past 12 months.
READ ALSO
Quarterly reports from US banks: JPMorgan, Wells Fargo and Citigroup open the earnings season on Wall Street