Amid the growing uncertainties over the US economy, the biggest names in the financial industry are set to release their earnings report on Thursday. All eyes are set on the relative impact of the Federal rate hike on the banks’ financial data and the adjustments occurred during the first three-months of Trump’s administration.
JP Morgan Chase
Before the market opens on Thursday, the New York City based multinational banking and financial services holding company is scheduled to release its quarterly earnings report. Market speculators are betting for upbeat figures after the recovery of the fixed income, currencies and commodities trading in 2016.
As one of the leading US financial services firm, with assets of $2.5 trillion and operations, JP Morgan received a consensus estimate of EPS $1.51 or approximately $5.5 billion for the quarter from Zacks Investment Research. For the same quarter last year, the Company had the consensus EPS forecast of $1.35. Should the optimism over the stock prevails; the best case scenario would result into $1.59 per share of profits considering the current pressure due to hard Brexit.
During the last earnings report, the Bank had net income of $6.7 billion to $1.71 per share, reflecting the intense client focus and solid performance across the business.
Chairman and CEO Jamie Dimon noted in his statement that the Company had double digit growth in deposits and core loan balances. “Our credit card sales volume was a record, and for the year we had over $1 trillion of merchant processing volume.” Mr. Dimon also added that Asset Management and Commercial Banking both grew loans and deposits nicely in a competitive environment.
Currently, the banking is betting on end-to-end digital banking, electronic trading and investment advice together with self-directed investing. The banking company is also into innovative fintech solutions to improve its digital and other customer offerings.
Citigroup Inc. was decelerating to $58.95 during the afterhours, as the market weighed in the expectations for its upcoming first quarter earnings data on Thursday. Recently, the bank topped the global transaction ranks conducted by industry analytics firm Coalition. The data proved the dominance of Citigroup and the improvement of its market share in trade finance.
For the fiscal quarter ending March 2017, the American bank is expected to post $1.24 earnings per share, higher than the previous consensus EPS estimate of $1.11 from the same period last year. During the last quarter, Citigroup had $1.14 earnings per share, which translated into $3.6 billion net income and revenue of $17.0 billion.
The positive outlook remains on the Bank as the cost of credit is expected to rise after the loan growth and the seasoning and tax rate to be approximately 31 percent. Adding to this, the global investment banking fees surged from January to March, CitiBank happened to be one of the banks which will benefit from it. Citigroup has also sustained its commitment to automate processes and enhance digital capabilities, thus, this could result in a significant efficiency ratio and will likely reflect on its earnings.
Following the sales scam in 2016, Wells Fargo has been putting effort to erase the stain. In the quarter ended in December 2016, the Bank posted $5.3 billion net income with diluted earnings per share of $0.96, including the net hedge ineffectiveness accounting impact of $0.07.
For this quarter, the possible decline in the Bank’s mortgage revenues and the increase of expenses may leave an unexpected impact. Wells Fargo has been putting its cash on mobile banking technology, digital lending and brokerage offerings. In terms of its mortgage business, the Bank expects a 2.5 percent reduction of funding volumes, which will be originated from lower referrals in the last three months of 2016.
At the conclusion of Tuesday session, Wells Fargo & Company lost 0.70 percent to $54.16. The stock remained in a tight range after opening at 54.23 with a session high of 54.26 and a session low of 53.26. The San Francisco, California based international bank has a market capitalization of $269.53 billion and a dividend yield of 2.81 percent. Apparently, there has been no positive response from the investors amid the earnings season.
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