Reality is setting in for three of the largest U.S. banks, as their second-quarter results reveal a mixed bag of performance metrics. On Friday, JPMorgan Chase, Citigroup, and Wells Fargo reported growth in profits and revenues compared to the previous quarter and last year, meeting or exceeding Wall Street estimates. Despite this positive news, their stocks fell in morning trading, with net interest income (NII) proving to be a focal point of concern.
JPMorgan Chase saw its stock drop by 2% after reporting $22.9 billion in NII, falling short of Wall Street’s expectations. Despite a record quarterly profit of $18.1 billion, the bank maintained its NII projections at $91 billion, disappointing investors. The bank also saw rising provisions for loan losses and expenses.
Citigroup showed promising signs from its ongoing transformation led by CEO Jane Fraser. The bank’s simplification efforts resulted in operating expenses dropping by 2% year-over-year to $13.4 billion for the quarter. Revenue increased by 4% to $20.1 billion, while net income stood at $3.2 billion. However, challenges remain in expanding market share and further reducing expenses.
Wells Fargo experienced a 7% plunge in its stock after reporting an NII of $11.92 billion, which was less than analysts had expected. Despite this, both revenue and earnings per share beat estimates, with revenue rising slightly to $20.7 billion. The bank continues to face headwinds in NII and operating expenses, with a bottoming out anticipated in the second half of 2024.
Each bank’s results highlight different strengths and challenges, reflecting the evolving landscape of the financial sector. While JPMorgan deals with rising expenses and loan loss provisions, Citigroup focuses on executing its transformation strategy, and Wells Fargo braces for ongoing NII headwinds. Investors will continue to closely monitor these developments in the coming quarters.