US Banking announces better-than-expected third quarter, despite headwinds

The big ones banks of USA announced this Friday a third quarter of profits and exceeded analyst expectations both in terms of profits and revenues, despite the “headwinds” that come from both the economic situation of the country and the international war conflicts.

The shares of JPMorgan, Citigroup and Wells Fargo, the three banks that today gave the starting signal for financial business results, appreciated on the New York Stock Exchange.

Eyes on war conflicts

For America’s largest bank, JPMorgan Chase, third-quarter revenue hit $13.15 billion, up from $9.74 billion a year ago.

That boosted the giant’s shares to $4.33 per share, exceeding the $3.95 per share expected by analysts surveyed by FactSet.

Revenue rose 22% from a year earlier to $39.87 billion. That was slightly ahead of the $39.63 billion analysts had expected.

However, Jamie Dimon, executive director of the entity, warned that the wars in Israel and Ukraine could have far-reaching effects.

Dimon said that these two fronts “can have far-reaching impacts on energy and food markets, global trade and geopolitical relations.”

“This may be the most dangerous moment the world has seen in decades.”he said in a statement.

Banks benefit despite headwinds

Consumers and businesses have continued to borrow, despite high rates, and total loans increased 18% for JPMorgan.

For example, credit card spending was up 9% and card loan balances were up 16%.

Dimon noted that American households and businesses remain healthy overall. But he warned of government deficits and that interest rates could continue to rise.

“I am less concerned about the economic effect than the geopolitical one,” Dimon said in a call with the press, after the results were published.

For his part, Wells Fargo CEO Charlie Scharf said in a statement that year-over-year revenue growth in the third quarter included “both higher net interest income and non-interest income”since “they benefited from higher rates.”

While the CEO of Citigroup, Jane Fraser, highlighted in a statement that “despite the headwinds” The bank achieved revenue growth.

Friday’s earnings report includes the period during which Fraser announced that the bank would be divided into five main business lines, the executive’s latest change since she took over in March 2021.

According to the specialized press, the new structure, announced on September 13, will include job cuts.

Nine months of profits

If not only the last three months are taken into account, but also the calculation from January to September, JPMorgan Chase obtained a profit of US$ 40,245 million in the first nine months of 2023, 50.9% more compared to the same period of the year. previous year, after purchasing First Republic Bank at a bargain price in early May.

While the third largest bank in the United States, Wells Fargo, obtained a profit of US$ 15,696 million in the first nine months of 2023, 49% more compared to the same period of the previous year.

However, Citigroup had a profit of US$ 11,067 million in the first nine months of 2023, 10.26% less than in the same period of the previous year, mainly due to the increase in expenses and the higher cost of credit, since income grew.