Earnings season kicks off today with big banks reporting

Earnings season for financial services officially kicked off this morning, with three of the top four banks reporting earnings.

Let’s look at JPMorgan first. By most measures, they crushed it. The country’s largest bank?reported?$13.42 billion in profit on $41.93 billion in revenue – that is for the first quarter folks, not a year. Did anyone ever tell you that banking is highly profitable?

Wells Fargo also?reported?solid earnings. Profit declined a little but it was still $4.62 billion on revenue of $20.86 billion. Both earnings and revenue were above Wall Street analysts’ expectations.

Citi also?topped?analysts’ estimates with $3.37 billion in profit on revenue of $21.10 billion, but both these numbers were down from the same period last year.

One of the themes across the three earnings reports was the impact of higher interest rates. Now that rates have been high for a while, consumers are moving money away from accounts that pay little interest into higher-yielding CDs or savings accounts.?

This has a direct impact on the important metric of Net Interest Income (NII). Banks expect NII to remain flat or decline for the rest of 2024.

Bank of America reports on Tuesday.

Featured

> JPMorgan’s Profit Rises, but Higher Interest Rates Start to Sting

www.wsj.com

America’s biggest bank warned that it is starting to pay more on customer deposits.

From Fintech Nexus

> Many Millennials, Gen Z Thin-File Consumers Make Good Credit Bets: Open Lending-TransUnion Report

By Tony Zerucha

A new report from Open Lending and TransUnion dispels the myth that many thin-file consumers, especially younger ones, are more risky.

Podcast

Tommy Nicholas, CEO & Co-Founder of Alloy on fighting fraud

Fighting fraud for banks and fintechs is more challenging today than ever before. But there is reason for optimism in this…

?? Listen Now

Also Making News

• USA:?Wells Fargo earnings top estimates even as lower interest income cuts into profits Wells Fargo on Friday reported first-quarter earnings and revenue that beat Wall Street expectations, despite a decline in net interest income.

• USA:?Citigroup tops estimates for first-quarter revenue on better-than-expected Wall Street results Citigroup posted first-quarter revenue that topped estimates, helped by better-than-expected results in the bank’s investment banking and trading operations.

• USA:?New twists in suit over CFPB’s $8 late fee favor credit card industry Business trade groups are expected to prevail in getting an emergency stay to stop the Consumer Financial Protection Bureau’s $8 late fee rule from going into effect on May 14. However, the lawsuit would still have many steps to go after such a decision.

• USA:?Bank of America faces a lawsuit about its overdraft fee relief program it offered during the pandemic When the pandemic was still in full swing in March of 2020, Bank of America launched a “Client Assistance Program” ?which promised to enable customers to request a refund for overdraft fees, non-sufficient funds fees, early withdrawal penalties for certificates of deposit, and monthly maintenance fees.

• USA:?Chase’s New Advertising Offering Is A Stroke Of Genius JPMorgan Chase’s new Media Solutions unit will enable the bank to get paid twice for purchases, and create an opportunity to get around interchange pricing limitations.

• Global:?Digital Bank bunq Reports New Funding with Plans for US Expansion Digital bank bunq has reported a net profit of €53 million for 2023 as part of its annual report. bunq also revealed that it acquired additional funding of €29 million from its existing backers.

• Asia:?H.K. Seen Approving Bitcoin, Ether ETFs as Soon as Monday Hong Kong may approve exchange-traded funds investing directly in both Bitcoin and Ether, the two dominant cryptocurrencies, as soon as Monday, according to people familiar with the matter.

• UK:?SMB financial management platform Mimo raises ￡15.5m Mimo, a platform designed to simplify business-to-business payments, has raised ￡15.5 million in an investment round led by Northzone.