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Large US Banks’ Earnings Topped Analysts’ Expectations

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JPMorgan Chase’s 1Q18 earnings 

JPMorgan Chase (JPM) reported an EPS (earnings per share) of $2.37 in 1Q18—compared to the consensus estimate of $2.28. The bank’s revenue came in at $28.52 billion—compared to the expectations of $27.68 billion. JPMorgan Chase reported a 7% decline in investment banking revenues to $1.6 billion. The bank’s return on equity stood at 15%.

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Citigroup topped the earnings forecast

Citigroup (C) reported a 13% rise in its 1Q18 earnings to $4.6 billion due to higher overall corporate lending and strong gains in equity trading. Citigroup posted revenue of $18.87 billion—compared to expectations of $18.86 billion. The trading revenue grew 3% to $5 billion.

Wells Fargo could face $1 billion in penalties

The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency offered to resolve their investigation into Wells Fargo (WFC) with a penalty of $1 billion. As a result of the additional penalty, Wells Fargo might revise its 1Q18 earnings. Wells Fargo’s profit jumped 6% to $5.9 billion during the first quarter.

Regulators might ease the capital curb on leverage

The Fed and the Office of the Comptroller of the Currency proposed to ease the eSLR (enhanced supplementary leverage ratio), which was designed to restrict banks’ leverage. If approved, the move might release $400 million of large banks’ (XLF) capital. The eSLR was enacted to ensure that the nation’s largest banks (VFH) are holding a minimum level of capital and aren’t over-extending themselves on leverage.

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