Wall Street banks trade mixed in premarket after Q1 earnings

Traders were offered the first Q1 reports from major Wall Street banks today. JPMorgan (JPM.US), Wells Fargo (WFC.US) and Citigroup (C.US) published their January-March 2024 results before opening of Wall Street cash session today. Overall, reports turned out to be somewhat conservative, triggering mixed reaction in the premarket..

JPMorgan

JPMorgan (JPM.US) reported results that were better-than-expected. Profit turned out to be higher than expected at $4.44, while revenue of $42.55 billion also exceeded market expectations. Lower-than-expected provisions for credit losses are also welcome. Loan growth disappointed, while deposit growth surprised to the upside. Nevertheless, JPMorgan decided to keep full-year net interest income forecast unchanged. This is somewhat disappointing as the forecast was already seen as conservative. Company's shares trade around 2.5% lower in premarket.

Q1 2024 results

• EPS: $4.44 vs $4.17 expected
• Revenue: $42.55 billion vs $41.64 billion (+8.2% YoY)
  • FICC trading: $5.30 billion
  • Equity trading: $2.69 billion
  • Investment banking revenue: $1.99 billion
  • CIB Markets total revenue: $7.98 billion vs $7.71 expected
  • Advisory revenue: $598 million
  • Equity underwriting revenue: $355 million
  • Debt underwriting revenue: $1.05 billion
  • Corporate & investment bank IB fees: $2.00 billion
• Total loans: $1.31 trillion vs $1.33 trillion expected
• Total deposits: $2.43 trillion vs $2.40 trillion expected
• Provision for credit losses: $1.88 billion vs $2.78 billion expected (-17% YoY)
• Net charge-offs: $1.96 billion vs $2.2 billion
• Managed net interest income: $23.20 vs $23.22 billion expected
• Compensation expenses: $13.12 billion vs $12.62 billion expected
• Net yield on interest-earnings assets: 2.71% vs 2.75% expected
• Return on equity: 17% vs 15.9% expected
• Common Equity Tier 1 ratio: 15.0% vs 14.9% expected
• Assets under management: $3.56 trillion vs $3.57 trillion expected
• Cash & due from banks: $22.75 billion vs $28.97 billion

Full-year 2024 forecasts

• Net interest income: unchanged at 'about $90 billion'
• Net interest income excluding CIB markets: 'about $89 billion' vs 'about $88 billion' previously
• Adjusted expense: 'about $91 billion' vs 'about $90 billion' previously

Source: xStation5

Wells Fargo

Wells Fargo (WFC.US) also reported better-than-expected results, with profit and sales beating expectations. Net interest income missed expectations slightly, as did net interest margin. Unlike JPMorgan, Wells Fargo disappointed in terms of both deposits and loans. However, just as it was the case with JPMorgan, Wells Fargo also reported lower-than-expected provisions for credit losses. Nevertheless, company still expects a 7-9% drop in 2024 net interest income. Company's shares trade flat in premarket.

Q1 2024 results

• EPS: $1.20 vs $1.08 expected
• Revenue: $20.86 billion vs $20.21 billion
  • Commercial banking: $3.15 billion vs $3.35 billion expected
  • Corporate and investments banking: $4.98 billion vs $4.85 billion expected
  • Wealth & investment management: $3.74 billion vs $3.73 billion expected
• Net interest income: $12.23 billion vs $12.32 billion
• Net interest margin: 2.81% vs 2.84% expected
• Efficiency ratio: 69% vs 68% expected
• Total deposits: $1.34 trillion vs $1.35 trillion expected
• Total loans: $928.1 billion vs $933.49 billion
• Provisions for credit losses: $938 million vs $1.27 billion expected
• Return on equity: 10.5% vs 9.1% expected
• Common Equity Tier 1 ratio: 11.2% vs 11.1% expected
• Net charge-offs: $1.16 billion vs $1.15 billion expected
• Personnel expenses: $9.49 billion vs $9.19 billion expected
• Non-performing assets: $8.24 billion vs $8.59 billion

Full-year 2024 forecasts

• Wells Fargo still expects a 7-9% drop in net interest income

Source: xStation5

Citigroup

Headline results from Citigroup (C.US) mimicked those of JPMorgan and Wells Fargo - profit and sales were higher than expected. And just like in the case of those two banks, Citigroup also reported lower provisions for bad loans (cost of credit). On a flip side. Citi reported lower than expected loans and decided to keep full-year 2024 forecasts unchanged. Company's shares trade slightly higher in premarket.

Q1 2024 results

• EPS: $1.58 vs $1.23 expected
• Revenue $21.10 billion vs $20.38 billion expected
  • FICC trading: $4.15 billion vs $4.12 billion expected
  • Equity trading: $1.23 billion vs $1.11 billion expected
  • Investment banking revenue: $903 million vs $776.9 million expected
• Net interest income: $13.51 billion
• Net charge-offs: $2.30 billion vs $2.18 billion
• Cost of credit: $2.37 billion vs $2.64 billion expected
• Total loans: $674.68 billion vs $688.44 billion
• Total deposits: $1.31 trillion
• Efficiency ratio: 67.3%
• Comment equity Tier 1 ratio: 13.5% vs 13.4% expected

Full-year 2024 forecasts

• Adjusted revenue: unchanged at 'about $80-81 billion'
• Adjusted expenses: unchanged at 'about $53.5-53.8 billion'

Source: xStation5