Major financial institutions including JPMorgan Chase & Co., Bank of America, Citigroup, and BlackRock announced their Q4 earnings today. With a hike in interest rates, major banks saw their net interest income (NII) getting a boost. However, banks like JP Morgan’s macroeconomic outlook warned of a “a mild recession in the central case.”
Let us take a look at the major bank earnings today.
JP Morgan (NYSE: JPM)
JP Morgan stock was down in pre-market trading on Friday even as it reported strong Q4 results. The financial services company saw revenues of $34.5 billion, up 17.9% year-over-year and beating estimates by $270 million. Adjusted earnings came in at $3.56 per share beating Street expectations of $3.08.
However, the bank’s provision for credit losses in the fourth quarter increased 49% quarter-on-quarter to $2.3 billion due to a “modest deterioration in the Firm’s macroeconomic outlook, now reflecting a mild recession in the central case, as well as loan growth in Card Services.”
JPM has now guided for FY23 adjusted noninterest expense of approximately $81 billion versus FY22 actual noninterest expense of $76.1 billion.
The bank has forecasted an FY23 total net interest income of around $73 billion.
Analysts remained cautiously optimistic about JPM stock with a Moderate Buy consensus rating based on nine Buys and five Holds.
Bank of America Corp. (NYSE: BAC)
Bank of America shares dipped in pre-market trading on Friday as its net interest income (NII) in the fourth quarter fell short of estimates. The bank’s NII climbed 29% year-over-year to $14.7 billion but below Street estimates of $14.8 billion.
The bank generated revenues of $24.5 billion surpassing estimates by $360 million. Diluted earnings came in at $0.85 per share coming in ahead of Street expectations of $0.77.
Bank of America CEO Brian Moynihan commented, “The themes in the quarter have been consistent all year as organic growth and rates helped deliver the value of our deposit franchise. That coupled with expense management helped drive operating leverage for the sixth consecutive quarter.”
Analysts are cautiously optimistic about BAC stock with a Moderate Buy consensus rating based on seven Buys and five Holds.
Citigroup (NYSE: C)
Citigroup ticked higher in pre-market trading on Friday even as the banking giant posted mixed Q4 results. Profits declined by 21% year-over-year to $2.5 billion and adjusted earnings came in at $1.10 per share. Q4 earnings fell short of estimates of $1.14.
The bank generated revenues of $18 billion, up 6% year-over-year and beating estimates by $30 million.
Citi’s cost of credit was around $1.8 billion in Q4 versus a negative $0.5 billion in the same period a year back “reflecting a net build in the allowance for credit losses (ACL) for loans and unfunded commitments of $640 million.”
Wall Street analysts are sidelined about Citigroup stock with a Hold consnesus rating based on three Buys, six Holds and one Sell.
BlackRock (NYSE: BLK)
BlackRock stock dipped in pre-market trading on Friday as its Q4 results still beat estimates even after a year-over-year decline. The investment company saw revenues fall 15.1% year-over-year to $4.34 billion but still surpassing estimates by $70 million.
Adjusted Q4 earnings topped estimates at $8.93 per share handily beating Street estimates of $8.1.
BlackRock’s Chairman and CEO, Larry Fink commented, “We ended the year with strong momentum, generating $114B of Q4 net inflows, representing 3% annualized organic base fee growth, reflecting continued strength in ETFs and significant outsourcing mandates.”
Analysts are bullish on BLK stock with a Strong Buy consensus rating based on nine Buys and three Holds.
