Major financial institutions J.P. Morgan and Wells Fargo are experiencing reduced earnings.
Big names in U.S. banking, JPMorgan and Wells Fargo, started off their summer earnings reports with lower profits in the last quarter. JPMorgan had to shell out more money for potential loan losses, while credit demand simply didn't heat up as much. On the other hand, Wells Fargo's profit drop was largely due to a dip in net interest income, but they managed to outshine analysts' expectations.
JPMorgan's third-quarter net income dipped to about $12.9 billion from $13.2 billion last year, representing a $300 million decrease. Earnings per share stayed above analysts' projections with $4.37, as opposed to the predicted $3.99. Revenues saw an increase, going from $39.9 billion to $42.7 billion, just beating the forecast of $41.4 billion. Investment banking fees saw a significant hike of 31%, thanks to growing activity in mergers and issues.
Wells Fargo's third-quarter net income was lowered to $5.1 billion, a 11% drop from the previous year's figure. Earnings per share coddled investor expectations at $1.42 against the projected $1.28. Revenues, however, saw a modest fall to $20.4 billion from $20.9 billion. The financials were affected by a decrease in credit demand and an increase in interest payments to depositors. Net interest income, which represents the difference between income from loans and costs associated with deposits, decreased by 11% to a near $11.7 billion.
More leading U.S. banks, including Citigroup, Bank of America, Morgan Stanley, and Goldman Sachs, are scheduled to release their third-quarter earnings reports in the coming week.
Wells Fargo's struggle with lower net interest income contributed to their decreased third-quarter net income compared to the previous year, impacting their overall earnings. Despite this, they managed to meet analysts' expectations for earnings per share.
In contrast to JPMorgan, Wells Fargo's earnings report showed a larger percentage drop in net income, but they still maintained operations in the telecommunications sector, such as with their partnership with Wells Fargo Telecommunications Services, Inc.
