US Banking Giants Brace For Fourth-Quarter Earnings Amid Mounting Bad Debts, Interest Rate Pressure
Portfolio Pulse from Benzinga Neuro
U.S. banking giants are facing a challenging fourth quarter with a rise in bad debts and the impact of higher interest rates. Non-performing loans at the four largest U.S. banks have increased by nearly $6 billion, reaching $24.4 billion. The banks are also expected to take a one-time charge due to a special assessment by the FDIC related to the failures of Silicon Valley Bank and Signature. Despite these challenges, bank shares have risen by 20% since October, buoyed by the Fed's signals of halting interest rate hikes. JPMorgan Chase & Co. (JPM), Bank of America Corp (BAC), Wells Fargo & Co (WFC), and Citigroup Inc. (C) are set to report earnings on Jan. 12.

January 08, 2024 | 1:17 pm
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Bank of America Corp anticipates a decrease in fourth-quarter earnings due to higher bad debts and FDIC charges, despite overall banking sector gains.
Bank of America Corp is likely to report lower earnings for Q4 due to the increase in bad debts and additional FDIC charges, which could negatively affect the stock price in the short term.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Citigroup Inc. braces for a potential earnings hit in Q4 due to increased bad debts and a special FDIC charge, in contrast to the sector's share growth.
Citigroup Inc. is likely to face a decline in Q4 earnings as a result of the surge in bad debts and the FDIC's special assessment, which may lead to a temporary dip in its stock price.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
JPMorgan Chase & Co. faces potential earnings decline due to increased bad debts and a one-time FDIC charge, despite a rise in share price.
The increase in non-performing loans and the one-time FDIC charge are likely to negatively impact JPM's Q4 earnings, which could lead to a short-term decline in stock price despite the recent uptick.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Wells Fargo & Co may see a drop in earnings from rising non-performing loans and FDIC assessments, despite a bullish trend in bank stocks.
Wells Fargo & Co's fourth-quarter performance is expected to be negatively impacted by the rise in bad debts and the one-time FDIC charge, potentially leading to a short-term stock price decrease.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90