Thursday, November 30, 2023

US banks are doing better than expected, but inflation and war are on the rise

US banks reported better-than-expected results, driven by exceptional elements that should disappear in a context of high inflation in the United States and geopolitical uncertainty, according to data released this Friday.

JPMorgan Chase, the first of the big banks to release figures, announced a sharp increase in its net profit in the third quarter (+ 35%, to $ 13.15 billion), higher than the forecasts of analysts.

Its CEO, Jamie Dimon, quickly downplayed the celebrations. “This is probably the most dangerous moment the world has seen in decades,” he said in a statement, referring to the war in Ukraine and recent clashes between Israel and the Palestinian Islamist movement Hamas.

Citigroup CFO Mark Mason highlighted the recovery in consumption, characterized by a 4% increase in money spent through credit cards.

But he also evoked “a lot of uncertainty” shaping the current moment, regarding the conflicts in Ukraine and the Middle East.

Citigroup also did better than analysts expected: its net profit rose 2% a year, to $3.54 billion.

The bank began a major strategic reorientation and refocused on institutional clients, private banking and wealth management, as well as credit cards.

The details of the many job cuts that will result from this new strategy should be known during the presentation of the annual results, in early 2024.

Wells Fargo also posted better-than-expected results. Its turnover amounted to $20,850 million and its net profit amounted to $5,750 million.

“We are seeing the impact of the slow economy, with loan amounts declining and delinquency rates continuing to deteriorate moderately,” Charlie Scharf, head of the bank, was quoted as saying in a press release.

As of 6:30 p.m., JPMorgan shares gained 1.97%, to $148.62, on the New York Stock Exchange, Citigroup shares rose 0.42%, to $41,701, and Wells Fargo rose 2.67%.

World Nation News Desk
World Nation News Desk
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