Accounting

Big banks’ profits are up

JPMorgan, Wells Fargo, and Citi all beat expectations.
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Things are looking up this quarter for three of the nation’s largest banks. JPMorgan Chase, Wells Fargo, and Citi all saw net income and revenue rise over the last quarter, and all three beat analysts’ expectations for both revenue and earnings per share.

JPMorgan Chase, the largest US bank by consolidated assets, reported net income of $13.4 billion in Q1, up 44% from last quarter, and net revenue of $42.5, up nearly 7% over Q4 2023. Wells Fargo, the nation’s third-largest bank, saw its Q1 net income rise 34% QoQ, to $4.6 billion. Its total revenue of $20.9 billion was 2% higher than last quarter. Citi, the fourth-largest bank in the US, reported revenue of $21.1 billion, or 21% higher than Q4 2023. Its net income was $3.4 billion, versus the net loss of $1.8 billion it experienced last quarter.

High interest rates, which allowed banks to charge more for loans, gave large banks a boost last year. But now consumers are responding to elevated interest rates by moving their money from checking and savings accounts to higher-yield vehicles like CDs, JPMorgan CFO Jeremy Barnum said during an earnings call. Wells Fargo likewise observed a “customer migration to higher-yielding deposit products.”

The big banks’ net interest income, or NII, numbers were mixed. A key metric, NII represents the income banks bring in from loans and securities minus what they pay out to depositors. JPMorgan’s NII was up 11% YoY, but Citi’s fell 2%, and Wells Fargo’s was down 8% YoY.

And the banks’ NII forecasts for the year were muted. Analysts thought the banks might raise NII expectations in anticipation of fewer interest rate cuts, Bloomberg reported, but that didn’t happen.

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News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.