Revenue climbed 8 percent to $20 billion excluding the accounting adjustment and the Akbank transaction. Expenses rose 1 percent to $12.1 billion due to “higher legal and related costs,” according to the statement.
Shares of the company advanced to $51.94 at 8:36 a.m. from $50.81 on July 12, and gained 28 percent this year through July 12. JPMorgan Chase & Co., the biggest U.S. bank, reported profit on July 12 of $6.5 billion, or $1.60 a share. Wells Fargo & Co., the fourth-biggest, posted $5.52 billion, or 98 cents a share.
Revenue at Citigroup's stock-trading business, run from London by Derek Bandeen, increased 68 percent from a year earlier to $942 million. Richard Staite, an analyst with Atlantic Equities LLP, predicted $634 million, and Moshe Orenbuch with Credit Suisse Group AG estimated $835 million. JPMorgan's stock-trading revenue for the period was $1.3 billion, a 24 percent increase Citigroup continued winding down and selling unwanted investments in the Citi Holdings unit, which contains a consumer-finance business and billions of dollars of U.S. mortgages. Assets in the division fell 31 percent to $131 billion. Losses dropped to $570 million from $910 million a year earlier.
Eoin Treacy's view With major banks such as JPMorgan, Wells Fargo and Citigroup exceeding earnings estimates one can only conclude that the sector is on a recovery trajectory after a very difficult few years. One might somewhat sardonically comment that it should be considering how much assistance it received. Perhaps a more interesting comparison is that between the relative health of the US banking sector, which was forced to make massive write downs early, and the still moribund state of European banks which are still dealing with a significant bad loans issue.
Despite the fact that tighter liquidity conditions are likely to have an effect on US Banks, provided the S&P 500 Banks Index continues to hold above or in the region of its 200-day MA on pullbacks the benefit of the doubt can be given to the upside.
The Euro Stoxx Banks Index remains in a more than yearlong range in the region of the 2008 lows and a sustained move above 125 will be required confirm a return to medium-term demand dominance.