The United States’ largest banks JP Morgan & Chase (JPM.US), Wells Fargo (WFC.US) and Citigroup (C.US) reported Q1 financial results that beat Wall Street analysts’ expectations. The strong results eased fears around the banking crisis, and the companies’ stocks are gaining ahead of the open. JP Morgan shares gained nearly 6%, Wells Fargo 4%, and Citigroup was trading 2% higher in pre-market trading. At the same time, banks set higher loan provisions, signaling caution about the impact of Fed tightening on the economy and the financial health of some customers.

The banks positively surprised analysts and issued optimistic revenue and profit forecasts. Source: XTB Research, Bloomberg

JPMorgan&Chase (JPM.US)

Revenues: $38.3 billion vs. $36.19 billion

Earnings per share (EPS): $4.1 vs. $3.41 forecast

• Full-year 2023 interest income forecast up from $73 billion to $81 billion
• Increase in provisions for ‘bad loans’ by $2.28 billion
• Total deposits up 1.6% k/k to $2.38 trillion ($2.33 trillion forecast)
• Significant growth in new accounts and large inflows in Q1 2023
• Better-than-expected result from bond trading ($5.70 billion vs. $5.25 billion expected)
• Performance from securities trading below expectations ($2.68 billion vs. $2.75 billion expected)

Citigroup (C.US)

Revenue: 21.4 billion vs. $19.94 billion forecast

Earnings per share (EPS):$2.19 vs. $1.65 forecasts

• Forecast interest income for the full year 2023 – about $45 billion (
• Increase in provisions for “bad loans” by $1.98 billion
• Significantly higher-than-expected result from bond trading ($4.45 billion vs. expected $4.02 billion)
• Slightly lower-than-expected result from securities trading ($1.15 billion vs. $1.25 billion expected)

Wells Fargo (WFC.US)

Revenue: $20.73 billion vs. $20.03 billion forecast

Earnings per share (EPS): $1.23 vs. $1.13 forecasts

• Net interest income was $13.34 billion ($13.09 billion forecast)
• Interest margin of 3.20% was higher than 3.12% forecasts
• Bank made $1.2 billion more provisions for “bad loans” 
• Loans rose 6% y/y to $948.7 billion, but below $953.22 billion forecasts
• Deposits fell to $1.4 trillion

JP Morgan (JPM.US) stock chart, D1 interval. The shares of the largest bank in the US have recently respected support at the SMA200 (red line), and today’s opening indicates $135 per share. A potential price exit above $140/share levels from before the banking crisis could herald an easing of concerns around the financial sector and negate the bearish head-and-shoulders formation (RGR). Source: xStation5