Big Banks Top Q2 Estimates But Fail To Excite The Market As Caution Is In The Air
Portfolio Pulse from Upwallstreet
Bank of America, Citigroup, Wells Fargo, JPMorgan Chase, and Morgan Stanley all reported Q2 earnings that largely beat estimates, driven by higher net interest income due to increased interest rates. However, the market response was muted, and all banks increased their provisions for anticipated losses, indicating a cautious outlook.
July 18, 2023 | 6:20 pm
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NEGATIVE IMPACT
Citigroup's Q2 profit shrank due to slower corporate spending and layoffs. It also raised its provision for loan losses by nearly 40% to $1.8 billion.
The shrink in profit and increase in provision for loan losses could negatively impact the stock price in the short term.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
Morgan Stanley followed the trend of other big banks, reporting a 59% rise in credit loss provisions to $161 million.
The increase in credit loss provisions could indicate potential future risks, which may negatively impact the stock price in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
Bank of America beat Q2 estimates with earnings of 88 cents per share and revenue of $25.33 billion. However, it increased its allowance for credit losses on loans from $900 million to $1.1 billion.
While the bank's earnings beat estimates, the increase in allowance for credit losses indicates potential future risks, which could impact the stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
JPMorgan Chase posted a 67% jump in Q2 profit, but also increased its credit loss provisions by 62% from Q2 2022 to $2.9 billion.
While the bank's earnings were positive, the increase in credit loss provisions could indicate potential future risks, which may impact the stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
Wells Fargo's Q2 earnings were better than expected, with net income surging 57% to $4.9 billion. However, it increased its provisions for credit losses by 43% to $1.713 billion.
Despite the positive earnings, the increase in provisions for credit losses could indicate potential future risks, which may impact the stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100