So far, banks (XLF) that reported their 3Q17 earnings showed mixed trends. JPMorgan Chase’s (JPM) revenue and earnings comfortably beat consensus estimates. The bank reported revenue of $26.2 billion compared to an estimate of $25.23 billion and EPS (earnings per share) of $1.76 compared to $1.65. However, JPMorgan Chase’s fixed-income trading revenue fell 27% to $3.16 billion. It was lower than $3.25 billion projected by FactSet. Jamie Dimon, the bank’s chairman and CEO, warned in September of a possible fall in trading revenue ~20% in 3Q17.
Bank of America (BAC) posted upbeat results despite a 22% YoY (year-over-year) fall in the bond trading revenue. It reported EPS of $0.48 compared to the consensus estimate of $0.45 and revenue of $22.1 billion compared to $21.98 billion.
Citigroup (C) also reported better-than-expected results with a 3% YoY increase in global consumer banking revenue. The bank posted EPS of $1.42 compared to Thomson Reuters’ consensus estimate of $1.32 and revenue of $18.2 billion compared to $17.9 billion. Citigroup’s trading revenue fell 16% YoY to $2.9 billion.
Wells Fargo (WFC) reported revenue of $21.93 billion and missed analysts’ expectations of $22.4 billion. The bank said its profits were hit by legal costs of $1 billion. The bank reported a slightly better-than-expected EPS of $1.04, which excluded $0.20 of charges related to an old litigation.
PNC Financial Services (PNC) reported stronger results with its net interest income rising 11.9% YoY to $2.35 billion. THe EPS rose 17.4% to $2.16—compared to analysts’ expectations of $2.13.
Credit card lending losses
JPMorgan Chase and Citigroup boosted their consumer loan loss reserves in 3Q17—the biggest in more than four years. Both of the banks expect a rise in write-offs for the credit card lending business in the next few quarters. Citigroup thinks that the increase is coming faster than it expected.