REUTERS - Most big U.S. banks reported better-than-expected quarterly profits but failed to enthuse investors who were looking for better results and a sunnier outlook.
However, Morgan Stanley, which wrapped up big bank earnings on Wednesday, managed to pull a rare feat in producing more trading gains than rival Goldman Sachs.
While trading and mortgage lending remained weak, the banks started to see some long-awaited benefits of higher interest rates.
A snapshot of the earnings of the banks that reported:
JPMorgan Chase & Co
Bank of America Corp:
• Earnings (beat) - EPS 46 cents vs est. 43 cents
• Revenue (beat) - $22.83 bln vs est. $21.78 bln
• Story - http://reut.rs/2tbjKUE
• Helped by:
- Rise in net interest income, up 8.6 pct to $10.99 bln
- Jump in profit from consumer banking business; up 21.4 pct at $2.03 bln
- Higher efficiency ratio, up at 59.51 from 62.73 y-o-y
• Hurt by:
- 9 pct fall in trading revenue, mainly due to a 13.8 pct drop in FICC revenue
• Forecast:
- Expect 3Q17 markets results to face tough comparison with exceptionally strong 3Q16 - CFO
- Expects higher net interest income in Q3 vs Q2, as long as 'forward yield curve is realized and we see some loan and deposit growth' - CFO
- Will hire 200 bankers in global banking unit by end of 2018 - CEO
- Still very confident about hitting $53 bln expense target for FY2018 - CFO
• Comment:
- "Not interested in acquisitions to deploy excess capital: We just don't need the distraction" - Chief Executive Officer Brian Moynihan
Wells Fargo & Co:
Citigroup:
Goldman Sachs Group Inc:
• Earnings (beat) - EPS $3.95 vs est. $3.39
• Revenue (beat) - $7.90 bln vs est. $7.52 bln
• Story - http://reut.rs/2vxLrbl
• Helped by:
- Dip in operating expenses, down about 2 pct at $5.4 bln
• Hurt by:
- Slump in bond trading revenue, down 40 pct
- Drop in investment banking revenue, falls 3.2 pct
• Forecast:
- To improve bond trading broadly, Goldman is looking for ways to do more business with existing clients - CFO Marty Chavez
• Comment:
- "Commodities is a story of challenges on all fronts, it was lower client activity and difficult market making environment" - CFO
Morgan Stanley:
• Earnings (beat) - EPS 87 cents vs est. 76 cents
• Revenue (beat) - $9.50 bln vs est. $9.09 bln
• Story - http://reut.rs/2uzslEO
• Helped by:
- Higher underwriting gains drive investment banking revenue
- Wealth management revenue up 9 pct at $4.2 bln
• Hurt by:
- Bond trading falls 4 pct to $1.3 bln
• Forecast:
- We are on track to complete project Streamline - CFO Jon Pruzan
- Uncertainty over taxes, regulatory reform likely to weigh on M&A activity - CFO
• Comment:
- "This quarter's results reaffirm that our strategy is working...this quarter represented an important test of our model" - CFO
BREAKINGVIEWS:
BofA's progress fails to achieve escape velocity
Goldman's compass points in wrong direction
Morgan Stanley gives Goldman a lesson in diversity
Citi, JPMorgan and Wells show reliance on D.C.
(Reporting By Aparajita Saxena, Nikhil Subba and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)