The banking sector has started off the earnings season with many of the major players reporting their results this week. While some managed to beat market expectations on revenue and earnings, many missed. Several of them saw a decline in profits. Here’s a look at how some of the leading banks performed during the second quarter:
JPMorgan
JPMorgan Chase & Co. (NYSE: JPM) reported its Q2 2022 results on Thursday. The company saw revenues inch up by 1% to $30.7 billion compared to the prior-year period. Adjusted revenue also rose 1% to $31.6 billion. Earnings dropped 27% YoY to $2.76 per share.
Both the top and bottom line numbers missed estimates. The company said it has temporarily suspended share buybacks and its CEO Jamie Dimon warned about macroeconomic challenges.
“The U.S. economy continues to grow and both the job market and consumer spending, and their ability to spend, remain healthy. But geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity, combined with the war in Ukraine and its harmful effect on global energy and food prices are very likely to have negative consequences on the global economy sometime down the road.” – CEO Jamie Dimon
Morgan Stanley
Morgan Stanley (NYSE: MS) also reported its Q2 results on Thursday. Revenues fell 11% year-over-year to $13.1 billion and adjusted EPS dropped 24% to $1.44. Both revenue and earnings missed analysts’ expectations. The results were hurt by a 55% decrease in investment banking revenue. The weakness in investment banking activity was partly offset by strength in equity and fixed income.
Wells Fargo
Wells Fargo & Company (NYSE: WFC) reported Q2 results on Friday. The bank’s revenues dropped 16% YoY to $17 billion while earnings fell 46% to $0.74. Both the top and bottom line numbers missed projections. The company stated that its results should continue to benefit from the rising interest rate environment with growth in net interest income expected to offset any near-term pressure on non-interest income. It also expects credit losses to increase from these incredibly low levels.
Citigroup
Citigroup Inc. (NYSE: C) also reported Q2 earnings results on Friday. Revenues rose 11% YoY to $19.6 billion but earnings dropped 23% to $2.19. However, both numbers topped estimates. The bank’s quarterly results benefited from rising interest rates and strong trading results.
Upcoming reports
Goldman Sachs (NYSE: GS) and Bank of America Corporation (NYSE: BAC) are set to report their Q2 earnings results on Monday. Analysts expect Goldman Sachs to deliver earnings of $7.25 per share on revenue of $10.8 billion while Bank of America is projected to deliver earnings of $0.78 per share on revenue of $22.6 billion.
Click here to access the full transcripts of the latest earnings conference calls of these banks