Bloomberg: Profit Drop at U.S. Banks Imperils Rally
Bloomberg reported that the six largest U.S. lenders, including JPMorgan Chase and Wells Fargo, may post an 11% drop in first-quarter profit, threatening a rally that has pushed bank stocks 19% higher this year.
Bloomberg said the banks will post $15.3 billion in net income when adjusted for one-time items, down from $17.3 billion in last year’s first quarter, according to a Bloomberg survey of analysts. Trading revenue at the biggest lenders is projected to fall 23% to $18.3 billion, according to Morgan Stanley analysts, who didn’t include their firm or Wells Fargo, Bloomberg noted.
Bloomberg quoted an analyst at Nomura Holdings as saying, “U.S. lenders, struggling to expand in commercial banking years after the housing collapse, haven’t matched last year’s overall results, even as bond and equity markets strengthened. Making matters worse, loan balances increased less than the economy, bucking a trend in previous recoveries.”
To read the full Bloomberg story, click here.