Three key takeaways from big bank earnings

livemint.com:

America’s biggest banks reported stronger-than-expected earnings in the first quarter, highlighting how a resilient economy is helping power everything from Main Street to Wall Street. JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley all reported revenue and earnings that beat or met analysts’ expectations. Consumer spending remained robust.

Pent-up demand for dealmaking, stock and bond sales lifted earnings at the Wall Street-heavy banks. A market rally continued in early 2024, boosting fees the banks collect on money they manage for clients. But the results were tempered by rising pressure from interest rates, which squeezed profit margins.

Banks are warning that the capital markets recovery is fragile. And many said they don’t expect much revenue and profit growth this year. As a group, the six big banks reported $35.63 billion in profits, down 3% from a year ago, with half of the banks reporting a decrease in profit and half of them reporting an increase.

Combined revenue rose 4% to $139.07 billion. Consumer spending Executives said the economy continued to look strong, with consumers and businesses both spending and borrowing. Revenue from wealth-management arms also increased.

Credit-card income and transaction volumes jumped. Aggregate spending on debit and credit cards at JPMorgan, the biggest issuer of the group, rose 9% and credit-card loans, or outstanding balances, rose 15%. Consumers across the board appear to be benefiting from higher paychecks.