DUS investment bank JP Morgan is benefiting from favorable interest rates and has earned more than it did a year ago. The largest U.S. financial institution reported profit of $13.42 billion, or $4.44 per share, for the first quarter. This is eight percent more than a year ago. On average, analysts expected earnings per share to decline by four percent.
JP Morgan highlighted higher interest income, with banks benefiting from the fact that they have increased interest rates on loans significantly more than on deposits. Added to this is the acquisition almost a year ago of struggling First Republic Bank, which has a strong lending business and thus also boosts interest income. The financial institution’s total revenue rose nine percent to $41.93 billion.
Severance pay at Citigroup
Meanwhile, expensive severance packages and subsidies to the government’s deposit protection fund are costing Citigroup a lot. The financial institution earned $3.4 billion last quarter, up from $4.6 billion a year ago. However, analysts had expected an even greater decline. Citi boss Jane Fraser ordered her institution to undergo a restructuring in September, resulting in thousands of job losses.
As a result, restructuring costs rose to $14.2 billion. Total revenue fell two percent to $21.1 billion in the first three months.
Wells Fargo earned $12.2 billion in net interest income in the first three months of the year. This is 8 percent less than a year earlier and slightly less than the $12.3 billion expected by analysts.
However, total revenue exceeded forecasts, helped by increases in investment advisory fees and brokerage commissions. “The investments we are making across all businesses contributed to our earnings improvement compared to the fourth quarter as increases in noninterest income more than offset the expected decline in net interest income,” Chief Executive Officer Charlie Scharf said in a statement.
Goldman Sachs, Bank of America Corp. and Morgan Stanley will report their numbers next week.
Source: Frantfurter Allgemeine
I work as an author at the World Herald News, a news website that also covers the economy. I have been writing about economic topics for over six years and have written extensively on topics such as unemployment, housing prices, and the stock market. My goal is to provide readers with expert insight into these important issues so they can make informed decisions.
