New Data: Bank profits Can Jump!

Thanks to higher-interest rates 

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Wells Fargo 2Q profit jumps 57% on higher interest rates 

Wells Fargo's profits jumped 57% in the second quarter thanks to higher interest rates and loan balances, the bank said Friday.

MATT OTT

July 14, 2023 at 4:59 AM 

Wells Fargo's profits jumped 57% in the second quarter thanks to higher interest rates and loan balances, the bank said Friday.

• San Francisco-based Wells earned $4.9 billion, or $1.25 per share in the period, on $20.5 billion in revenue. 
• That beat Wall Street analysts' targets, which called for profit of $1.16 per share on $20.1 billion in revenue.

In the same period last year, Wells earned $3.1 billion, or 75 cents per share, on $17 billion in revenue.

Like other banks, Wells has benefitted from the Federal Reserve’s aggressive interest rate hikes as the central bank tries to bring down the worst inflation since the 1980s.

The bank reported that its net interest income jumped 29% to $13.2 billion, from $10.2 billion a year ago.

Wells said it set aside another $949 million in its allowance for credit losses, mostly for commercial real estate office loans and higher credit card loan balances.

“While we haven’t seen significant losses in our office portfolio to-date, we are reserving for the weakness that we expect to play out in that market over time,” said CEO Charlie Scharf.

Wells is still trying to exit the strict federal guidelines imposed in 2018 that sets its asset cap at just under $2 billion after a series of scandals, including the uncovering of millions of fake checking accounts its employees opened to meet sales quotas. That order was expected to last only a year or two, but additional improprieties surfaced, making regulators skeptical about the bank’s efforts to clean up its act.

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JPMorgan Chase 2Q profits rose 67% with a boost from First Republic takeover

July 14, 2023 at 4:39 AM

NEW YORK (AP) — JPMorgan Chase & Co. said second-quarter profits rose by 67% as the nation's largest bank made more loans to customers and took advantage of higher interest rates and its recent acquisition of First Republic.

• JPMorgan said Friday that it earned $14.5 billion in the three months ended June 30, compared to a profit of of $8.65 billion in the same period a year earlier. 
• On a per share basis, the bank earned $4.75 a share. 
• Revenue rose to $42.4 billion from $31.6 billion a year ago.

The results beat Wall Street forecasts, with analysts surveyed by FactSet expecting the bank to post a profit of $3.97 a share.
JPMorgan has been one of the benefactors of the banking crisis that came after the failure of Silicon Valley Bank, Signature Bank and First Republic Bank. 

• The bank saw billions of dollars of deposits flow into its vaults, mostly from well-to-do customers, and was able to buy First Republic Bank after it failed.

In the deal, JPMorgan acquired 84 First Republic branches, bringing it $92 billion in deposits and $203 billion in loans and other securities. 

First Republic's rich clientele is currently being integrated into JPMorgan's private bank and wealth management businesses.