Key Takeaways from a Mixed Bag of Bank Earnings

The banks are out with mixed earnings.

JP Morgan Chase posted profits and revenues that crushed estimates thanks to a rebound in trading revenue in 2019.  Q4 profits were up 21% to $8.52 billion, or $2.57 a share as compared to expectations for $2.35. Managed revenue was up 9% to $29.2 billion.

Profit in the investment bank surged 48% to $2.9 billion on trading and sales. Bond trading revenue was up 86% to $3.4 billion. Stock traders posted a 15% increase in revenue to $1.5 billion, compared with the $1.35 billion estimate, as reported by CNBC.

“JP Morgan Chase produced strong results in the fourth quarter of 2019, capping off a solid year for the firm where we achieved many records, including record revenue and net income,” CEO Jamie Dimon said. “While we face a continued high level of complex geopolitical issues, global growth stabilized, albeit at a lower level, and resolution of some trade issues helped support client and market activity towards the end of the year.”

Wells Fargo Q4 Profits Fall 50%

Unlike JP Morgan Chase, Wells Fargo made a mess.

EPS of 93 cents was below expectations for $1.12.  Revenue of $19.86 billion was below estimates for $20.14 billion.  Quarterly profits came in at $2.87 billion – a considerable drop from the $6.06 billion posted year over year.   

“Wells Fargo is a wonderful and important franchise that has made some serious mistakes, and my mandate is to make the fundamental changes necessary to regain the full trust and respect of all stakeholders,” CEO Charles Scharf said, quoted by CNBC.  

“During my first three months at Wells Fargo my primary focus has been on advancing our required regulatory work with a different sense of urgency and resolve while beginning to develop a path to improve our financial results,” he added.

Citigroup Earnings Beat on Surge in Fixed-Income Trading

Citigroup EPS of $1.90 beat expectations for $1.84.  Revenue of $18.378 billion came in above estimates for $17.855 billion.  Fixed income trading came in at $2.9 billion, as compared to expectations for $1.24 billion.  Equities trading came in at $516 million, as compared to expectations for $673.3 million.