JP Morgan, Citigroup and Wells Fargo close the third quarter with declining profits, but the result is still above expectations. The former, the largest in the US by assets, reported a 7,6% year-on-year decline in profits (from $6,8 billion to $6,29 billion). The decline, the bank explains, is mainly linked to tax charges, while in the same period last year the group had recorded a tax benefit of 2,2 billion.
Earnings per share fell to $1,58 from $1,68, versus expectations for $1,39, while pre-tax earnings rose 32,8% to $8,94 billion, helped by lower costs and a slight increase in revenues in the wake of the rate hike decided by the Federal Reserve last December, the first since the beginning of the financial crisis.
As for Citigroup, the world's largest financial services firm reported earnings of $3,84 billion ($1,24 per share), down 11% from $4,29 billion ($1,35 per share) for the same period in 2015. Analysts had forecast earnings of $1,16 per share. Revenue dropped from $18,69 billion to $17,76 billion, again better than the $17,36 billion forecast.
Trading assets, excluding accounting adjustments, rose 16% to $4,13 billion from $3,57 billion in the same period last year. Investment banking division revenue climbed 15% from $944 million to $1,09 billion, while expenses fell 2% to $10,4 billion from $10,67 billion a year ago.
Also Wells Fargo saw profits drop in the third quarter, still beating analysts' forecasts. The San Francisco bank reported profits of $5,64 billion, $1,03 per share, compared with $5,8 billion, $1,05 per share, in the same period last year. Instead, analysts were expecting a profit of $1,01 per share. Revenue rose to $22,33 billion, more than analysts forecast ($22,21 billion).
The bank will pay a $185 million fine for apparently allowing its employees to open 2 million deposit and credit card accounts without customer authorization to meet sales targets: a scandal that will affect the balance sheets of the next quarters.
