Bank Earnings Season Kicks Off: JPMorgan, Citigroup, and Wells Fargo Preview; Net Interest Margins Expected to Improve in H2 2024

New York, New York, USA United States of America
Bank earnings season underway with JPMorgan Chase, Citigroup, and Wells Fargo releasing financial reports on Friday
Citigroup's earnings predicted to rise by 4.5% with a 3.3% increase in revenue and an anticipated increase in provision for credit losses
Financials sector will have over 40% of S&P 500 companies reporting earnings for Q2 2024, four out of five sub-industries within the Insurance industry expected to report year-over-year earnings growth, while Multi-line Insurance predicted to report a year-over-year decline in earnings
JPMorgan Chase predicted to see a 6.5% increase in net interest income and a slight increase in Q2 margin
Net interest margins expected to improve in H2 2024 as Treasury yield curve becomes less inverted
US economy's health closely watched as commercial banks and savings institutions had roughly $218.6 billion reserved for loan losses during Q1 2024
Wells Fargo expected to report a slight drop in total revenue, decrease in net interest income, and an anticipated provision for credit losses of $1.27 billion
Bank Earnings Season Kicks Off: JPMorgan, Citigroup, and Wells Fargo Preview; Net Interest Margins Expected to Improve in H2 2024

Bank earnings season is underway with JPMorgan Chase, Citigroup, and Wells Fargo set to release their financial reports on Friday. According to various sources, net interest margins are expected to improve in the second half of the year as the Treasury yield curve becomes less inverted. All three banks passed the Federal Reserve's stress test and maintained minimum capital requirements despite projected losses of $541 billion. However, office property net loss rates for this year's stress test are roughly triple those reached during the 2008 financial crisis.

JPMorgan Chase is predicted to see a 6.5% increase in net interest income to $23.2 billion and a slight increase in Q2 margin at 2.65%. The bank's provision for credit losses is projected to rise to $2.79 billion from $1.88 billion in Q1.

Wells Fargo is expected to report a 3.2% increase in earnings with a slight drop in total revenue and a decrease in net interest income. The bank's provision for credit losses is anticipated to be $1.27 billion, down from $938 million last quarter and $1.71 billion for the same period last year.

Citigroup's earnings are predicted to rise by 4.5% with a 3.3% increase in revenue, while its net interest income is expected to remain flat from Q1, and its provision for credit losses is anticipated to increase.

The Financials sector will have over 40% of S&P 500 companies reporting earnings for Q2 2024. Four out of five sub-industries within the Insurance industry are expected to report year-over-year earnings growth, while the Multi-line Insurance sub-industry is predicted to report a year-over-year decline in earnings of -16%. All three sub-industries within the Capital Markets industry are expected to report year-over-year earnings growth.

The upcoming quarterly refunding update from the US Treasury will provide information on how much bond supply there will be. The US economy's health is closely watched as commercial banks and savings institutions had roughly $218.6 billion reserved for loan losses during the first quarter of this year, up from $202.1 billion in 2023 and $175.5 billion in the previous year.


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Confidence

85%

Doubts
  • Are the projected losses for commercial banks and savings institutions accurate?
  • Is the increase in net interest margins guaranteed to occur in H2 2024?

Sources

96%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

JPMorgan Chase is set to report second-quarter earnings – here's what the Street expects

CNBC News Hugh Son Friday, 12 July 2024 04:01
  • Unique Points
    • JPMorgan Chase is scheduled to report second-quarter earnings before the opening bell on Friday.
  • Accuracy
    • Earnings: $4.19 a share expected, according to LSEG.
    • Revenue: $49.9 billion expected, according to LSEG.
    • Net interest income: $22.8 billion expected, according to StreetAccount.
    • Trading Revenue: Fixed income - $4.82 billion; Equities - $2.77 billion expected, according to StreetAccount.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

80%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

A big bank rally is about to be put to the test

Yahoo Finance David Hollerith Friday, 12 July 2024 07:32
  • Unique Points
    • The stocks of big banks such as JPMorgan Chase, Wells Fargo, and Citigroup have each climbed more than 20% since January.
  • Accuracy
    • These banks will report their second quarter results this week, kicking off another earnings season for the US banking industry.
    • Bank of America will report its second quarter results the following Tuesday.
    • The four largest US banks have outperformed the S&P 500 and an index tracking the wider industry, KBW Nasdaq Bank Index, by roughly double gains.
    • Despite a headline number from JPMorgan expected to show sizable net profit, analysts believe this will not grab much attention due to its unusual nature.
    • Net interest income for these banks is expected to decline from the sequential quarter as deposit costs stay elevated and loan demand remains weak.
    • New provisions set aside by the big four banks for future loan losses are expected to rise 26% from last quarter, compared to a stabilization in the wider industry.
    • Investment banking fees for these banks are expected to show sizable jumps, particularly in areas like Goldman Sachs and Morgan Stanley.
    • The Federal Reserve’s decision to start lowering rates from a 23-year high is eagerly awaited by smaller regional banks, who rely more on lending income and are exposed to weaknesses in the commercial real estate market.
    • Investor expectations for regional banks have been subdued due to increasing vulnerabilities and concerns over commercial real estate lending.
  • Deception (30%)
    The article contains selective reporting as it focuses on the expected decline in net interest income for the big banks and their increased provisions for loan losses, while downplaying their expected increase in investment banking fees. The author also uses emotional manipulation by implying that investors are 'hoping' for rate cuts and that smaller regional banks are 'waiting for' them, creating a sense of urgency and anxiety.
    • But the actual results from the big banks during the second quarter are not expected to stun, despite a headline number from JPMorgan that will likely blow away all rivals.
    • Commercial real estate worries first ignited at the start of this year when New York Community Bancorp (NYCB) set aside a surprising amount of money in case of loan losses in part to rent-regulated apartment complexes in the New York City area.
    • The stocks of these banks – the four largest in the US – have each climbed more than 20% since January, outperforming the S&P 500.
    • Where there will likely be more focus is what JPMorgan has to say about a key measure of lending profit known as net interest income. That profit – which measures the difference between what banks pay out in deposits and take in from their loans – is expected to be down from the sequential quarter. The same goes for the other three big banks.
    • Investors are hoping to see that net interest income for the second quarter will, ideally, be the trough for big banks this year.
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (95%)
    The author expresses a positive outlook towards the performance of big banks and their expected earnings, implying a pro-bank bias. He also mentions the anticipated Fed interest rate cuts as beneficial for these banks, further emphasizing his bias.
    • But the actual results from the big banks during the second quarter are not expected to stun
      • Investors have pushed down the stocks of various regional and small banks this year as new problems or concerns surface
        • That profit — which measures the difference between what banks pay out in deposits and take in from their loans — is expected to be down from the sequential quarter for all four big banks
          • The results from the big banks are also likely to reveal the cautionary stance these lenders are taking on credit as higher rates pose more challenges for their borrowers
            • The stocks of big banks are outperforming the rest of the S&P 500 this year
            • Site Conflicts Of Interest (100%)
              None Found At Time Of Publication
            • Author Conflicts Of Interest (100%)
              None Found At Time Of Publication

            98%

            The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
            (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

            A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

            S&P 500 Financials Sector Q2 Earnings Preview: Banks Expected to Report Largest Decline

            Insight by FactSet John Butters Friday, 12 July 2024 07:33
            • Unique Points
              • The Financials sector will have over 40% of S&P 500 companies reporting earnings for Q2 2024.
              • Four out of five sub-industries within the Insurance industry are expected to report year-over-year earnings growth: Property & Casualty Insurance (95%), Reinsurance (22%), Insurance Brokers (15%), and Life & Health Insurance (6%).
              • The Multi-line Insurance sub-industry is predicted to report a year-over-year decline in earnings of -16%.
              • All three sub-industries within the Capital Markets industry are expected to report year-over-year earnings growth: Investment Banking & Brokerage (53%), Financial Exchanges & Data (10%), and Asset Management & Custody Banks (10%).
              • The Financial Services industry is expected to report a year-over-year earnings growth rate of less than 1%. Within this industry, the Transaction & Payment Processing Services sub-industry is projected to report year-over-year earnings growth of 5%, while the Multi-Sector Holdings sub-industry is projected to report a year-over-year decline in earnings of -7%.
              • Sean Ryan, VP/Associate Director for the banking and specialty finance sector at FactSet, identified key themes and metrics to watch for banks during earnings season including interest rates, net interest income, noninterest revenues, credit issues, and estimates.
            • Accuracy
              • The Financials sector is predicted to report a year-over-year earnings growth rate of 4.3% for Q2 2024.
              • The Insurance industry is expected to report a year-over-year earnings growth rate of 31% and be the largest contributor to overall earnings growth in the sector.
              • The Banks industry is expected to report a year-over-year decline in earnings of -10% and be the largest detractor to overall earnings growth for the sector.
              • Net interest income for JPMorgan is expected to rise by 6.5% to $23.2 billion, and the bank’s Q2 margin would be slightly higher than last year’s at 2.65%.
              • Wells Fargo is expected to see a 3.2% increase in earnings with a slight drop in total revenue, and a decrease in net interest income.
            • Deception (100%)
              None Found At Time Of Publication
            • Fallacies (100%)
              None Found At Time Of Publication
            • Bias (100%)
              None Found At Time Of Publication
            • Site Conflicts Of Interest (100%)
              None Found At Time Of Publication
            • Author Conflicts Of Interest (100%)
              None Found At Time Of Publication

            99%

            The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
            (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

            A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

            JPMorgan, Citigroup In Buy Zones As Bank Earnings Kick Off

            Investors.com Financial News Site Analysis - Comprehensive Report on Market Coverage and Analysis - Overall Rating: 90/100 (Highly Reliable, Informative, and Engaging Source of Financial Information). Investor's Business Thursday, 11 July 2024 20:43
            • Unique Points
              • JPMorgan Chase, Wells Fargo, and Citigroup are set to release bank earnings early Friday.
              • , Net interest margins are expected to improve in the second half of the year as the Treasury yield curve becomes less inverted.
              • , All 23 major banks passed the Federal Reserve’s stress test and maintained minimum capital requirements despite projected losses of $541 billion.
              • , Office property net loss rates for this year’s stress test are roughly triple those reached during the 2008 financial crisis.
              • , JPMorgan, Wells Fargo, and Citigroup all increased their dividends after passing the annual stress tests.
              • , Jefferies analyst Ken Usdin raised his price target for JPM stock and Wells Fargo, forecasting five Fed rate cuts of 25 basis points through 2025.
              • , Net interest income for JPMorgan is expected to rise by 6.5% to $23.2 billion, and the bank’s Q2 margin would be slightly higher than last year’s at 2.65%.
              • , JPMorgan’s provision for credit losses is predicted to increase to $2.79 billion from $1.88 billion in Q1.
              • , Wells Fargo is expected to see a 3.2% increase in earnings with a slight drop in total revenue, and a decrease in net interest income.
              • , Wells Fargo’s provision for credit losses is anticipated to be $1.27 billion, down from $938 million last quarter and $1.71 billion for the same period last year.
              • , Citigroup’s earnings are predicted to rise by 4.5% with a 3.3% increase in revenue.
              • , Citigroup’s net interest income is expected to remain flat from Q1, while its provision for credit losses is anticipated to increase.
            • Accuracy
              • ]JPMorgan Chase, Wells Fargo, and Citigroup are set to release bank earnings early Friday.[
              • Net interest margins are expected to improve in the second half of the year as the Treasury yield curve becomes less inverted.
              • All 23 major banks passed the Federal Reserve’s stress test and maintained minimum capital requirements despite projected losses of $541 billion.
              • JPMorgan, Wells Fargo, and Citigroup all increased their dividends after passing the annual stress tests.
            • Deception (100%)
              None Found At Time Of Publication
            • Fallacies (100%)
              None Found At Time Of Publication
            • Bias (100%)
              None Found At Time Of Publication
            • Site Conflicts Of Interest (100%)
              None Found At Time Of Publication
            • Author Conflicts Of Interest (100%)
              None Found At Time Of Publication

            97%

            The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
            (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

            A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

            Your bank is about to reveal key information about the US economy’s health

            CNN News Site: In-Depth Reporting and Analysis with Some Financial Conflicts and Sensational Language Krystal Hur Thursday, 11 July 2024 11:00
            • Unique Points
              • The upcoming quarterly refunding update from the US Treasury will provide information on how much bond supply there will be.
              • Recession isn’t the market consensus. Stocks have surged to repeated record highs as strong corporate earnings expectations, cooling inflation and a resilient labor market build the case for a soft landing.
              • Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation had roughly $218.6 billion reserved for loan losses during the first quarter of this year, up from $202.1 billion in 2023 and $175.5 billion in the previous year.
            • Accuracy
              • ]The upcoming quarterly refunding update from the US Treasury will provide information on how much bond supply there will be.[
              • US financial system appears to be in a solid place after last year’s regional banking crisis. All 31 banks evaluated in the Fed’s annual stress test passed this year.
            • Deception (100%)
              None Found At Time Of Publication
            • Fallacies (95%)
              The article contains some instances of appeals to authority and inflammatory rhetoric, but no formal or blatant logical fallacies were found. The author quotes several experts in the field of economics and finance to support her claims about the current state of the economy and consumer spending. She also uses descriptive language to convey the potential risks facing consumers and banks, which could be considered inflammatory but does not lead to any fallacious reasoning.
              • ]The world will survive that, but I just think the odds are a little bit higher than other people think.[//
            • Bias (100%)
              None Found At Time Of Publication
            • Site Conflicts Of Interest (100%)
              None Found At Time Of Publication
            • Author Conflicts Of Interest (100%)
              None Found At Time Of Publication