The fourth quarter results of some of the largest banks in the United States were declared on 13th January. These banks comprises of JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup. These banks, often referred to as the “big four,” are considered bellwethers of the financial industry, and their quarterly earnings reports are closely watched by investors, analysts, and industry experts alike.
In this article, we will take a closer look at the key metrics reported by each of these banks, such as revenue, net income, and earnings per share, and discuss any notable trends or developments that emerged during the quarter.
JP Morgan Chase Q4 results
JP Morgan Chase reported fourth-quarter results on Friday showing that its profit and revenue exceeded expectations. The bank’s interest income rose by 48% due to higher rates and loan growth.
The key metrics the company reported are as follows: Earnings per share of $3.57, which exceeded the $3.07 estimate after adjusting for one-time items, and revenue of $35.57 billion, which is higher than the expected $34.3 billion.
The bank’s profit increased by 6% from the previous year to $11.01 billion, or $3.57 per share, and revenue rose by 17% to $35.57 billion. The bank’s net interest income was $20.3 billion, higher than the expected $19.3 billion by StreetAccount, and average loans increased by 6%.
However, the bank also set aside $2.3 billion for credit losses in the quarter, a 49% increase from the previous quarter and higher than the expected $1.96 billion by StreetAccount, due to expected defaults. The bank’s shares decreased by 3% in pre-market trading.
Bank of America Q4 results
Bank of America announced its fourth-quarter results on Friday showing that an increase in interest rates helped the bank offset a decline in investment banking.
The key metrics compared to Wall Street’s expectations are as follows: Earnings per share of 85 cents, higher than the expected 77 cents, and revenue of $24.66 billion, which is slightly above the forecasted $24.33 billion. The bank’s shares decreased by nearly 3% in pre-market trading.
Analysts had predicted that the bank would see an increase in interest income due to higher rates and loan growth during the fourth quarter. The bank reported a net interest income of $14.7 billion, a 29% increase from the same period last year, but slightly less than the expected $14.8 billion according to StreetAccount.
Wells Fargo’s Q4 results
Wells Fargo shares dropped on Friday after the bank reported a decline in profits due to a recent settlement and the need to increase reserves in the face of a deteriorating economy. The stock decreased by more than 4% in premarket trading.
The bank’s key metrics are as follows: Earnings per share of 67 cents, a decrease from $1.38 a year ago, and revenue of $19.66 billion, which is 5.7% lower than the previous year and below the expected $19.98 billion according to Refinitiv. The bank’s net income fell by 50% to $2.86 billion, or 67 cents a share, from $5.75 billion or $1.38 per share a year ago.
The decrease was partly due to lower mortgage banking and fewer originations. The bank set aside $957 million for credit losses, compared to reducing provisions by $452 billion a year ago. The provision included an increase of $397 million in the allowance for credit losses due to loan growth and an unfavorable economic environment.
This disappointing report came after the bank announced earlier this week that it would be withdrawing from the U.S. mortgage market and that it would have a $2.8 billion after-tax operating loss related to legal and regulatory costs last month.
City bank’s Q4 results
Citigroup reported a significant drop in its fourth-quarter net income, with a decrease of over 21% compared to the same period the previous year. This was due to a decrease in investment banking offset by a positive impact from increased interest rates. Additionally, the bank announced that it is reserving more funds for potential credit losses.
Citigroup’s fourth-quarter results showed a decrease in net income from $3.2 billion to $2.5 billion year-over-year. Earnings per share, after certain divestitures, were $1.10, but it is unclear if this is comparable to the $1.14 estimate from analysts.
Revenue was $18.01 billion, higher than the expected $17.9 billion forecasted by analysts. Net interest income was $13.27 billion, exceeding the estimate of $12.7 billion. Trading revenue in fixed income was $3.16 billion, above expectations, while equities trading was $789 million, below expectations.
The bank also set aside $1.85 billion for credit losses, which was higher than the predicted $1.79 billion by analysts. The bank’s shares decreased by 2.6% in early trading. Citigroup’s CEO Jane Fraser’s efforts to improve the bank’s performance have been hindered by the global economic slowdown and a decline in investment banking revenue, which was partly offset by an improvement in trading results for the quarter.