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Big US Banks Continued to Report Robust Earnings

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Apr. 23 2018, Published 7:16 a.m. ET

Tax law benefited big US banks in 1Q18

The six big US banks (XLF) (VFH)—JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC), Goldman Sachs (GS), Morgan Stanley (MS), and Bank of America (BAC)—posted record profits in 1Q18 due to tax savings under the new tax law. According to an Associated Press estimate, the six banks saved at least $3.59 billion last quarter due to the new tax law.

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Morgan Stanley topped the earnings forecast

Morgan Stanley reported an EPS (earnings per share) of $1.45 in 1Q18—compared to expectations of $1.25. Morgan Stanley’s revenue was $11.1 billion —compared to expectations of $10.36 billion. The bank’s net income rose more than 40% YoY (year-over-year) to $2.7 billion. Morgan Stanley’s equity trading revenue increased to $2.6 billion—up 30% from a year ago.

Goldman Sachs’ significant earnings beat

Goldman Sachs’ first-quarter results beat analysts’ expectations. The bank reported revenue of $10.04 billion—compared to expectations of $8.74 billion. Goldman Sachs’ EPS was $6.95—compared to expectations of $5.58. The revenue from equity trading rose 38% to $2.31 billion.

US Bancorp missed the revenue forecast

US Bancorp reported an EPS of $0.96 in 1Q18—compared to analysts’ estimate of $0.95. However, US Bancorp’s revenue at $5.47 billion was lower than the expectations of $5.53 billion. The bank’s earnings were mainly driven by higher interest income and lower taxes.

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