The three US big banks - Citigroup Inc (NYSE:C), JP Morgan Chase & Co (NYSE:JP) and Wells Fargo & Co (NYSE: WFC) - announced better than expected second quarter results on Friday.
Citigroup said its second-quarter revenue grew 2% as its trading desk saw a smaller-than-anticipated drop-off in activity. Quarterly profit came in at US$3.872bn, down 3% from US$3.998bn a year earlier.
Earnings per share however rose to US$1.28 from $1.24 a year ago on the back of continued share buy back activities. Analysts had a target of US$1.21 a share.
READ: Citigroup and JP Morgan impress, Wells Fargo doesn't
Revenue came in at US$17.9bn, roundly beating expectations of a drop from the US$17.5bn recorded a year ago and against market expectations of US$17.4bn. This was attributed to upticks in consumer and corporate banking.
The bank said Friday that it paid out 63% of its quarterly income in the form of dividends and share buybacks. Citigroup's stock has been the best performing among big banks in 2017, boosted by the June announcement of a plan to return US$19bn to shareholders in the next year -- about 30% more than it is expected to earn -- following the Fed's stress tests.
Citigroup's shares rose 0.2% to $67.16 in premarket trading.
JP Morgan Chase shares slip despite beating Wall Street targets
JP Morgan Chase & Co. (NYSE:JPM) said its second-quarter profit rose 13% as a boost from lending together with record profits in some businesses offset weaker trading results.
However, despite beating Wall Street expectations for both earnings and revenue, its shares slipped 0.7% in premarket trade.
The bank reported a profit of US$7.03bn, or $1.82 a share against a profit of US$6.2bn, or $1.55 a share in the same period 2016. Analysts polled by Thomson Reuters had set their sights on US$1.58 a share.
Revenue rose 4.7% to US$26.4bn against market expectations of US$25bn
J.P. Morgan's trading revenue fell 14% to US$4.8bn from US$5.56bn a year earlier, hit by the19% falloff in fixed-income trading compared with the prior-year period.
Wells Fargo's revenue falls short of market hopes
The US third-largest bank, Wells Fargo & Co. (NYSE:WFC) said its second-quarter profit rose 4.5% to US$5.81bn, or $1.07 a share against US$5.56bn, or $1.01 a share, in the same period of 2016. Analysts polled by Thomson Reuters had expected earnings of $1.01 a share.
Revenue rose slightly to US$22.17bn, but was short of the US$22.47bn expected by analysts. Its shares fell 0.8% in premarket trade.
Last year, the bank agreed to a US$185mln settlement with two regulators and a city official over opening as many as 2.1 mln accounts with fictitious or unauthorised information. The bank continues to face state and federal investigations and has said it is cooperating with authorities.
Costs at Wells Fargo increased 5.2% to US$13.5bn from US$12.9bn in the second quarter of 2016 and expenses as a share of revenue in the second quarter were 61.1%, slightly above the new target of 60% to 61% set at an investor presentation in May.
Beyond the costs associated with the sales scandal, the bank has said its efficiency ratio was also hurt by lower loan growth and higher funding costs.
After a volatile 2016, large US banks' stocks had come roaring back since the election, especially as the Trump administration nominated people with deep Wall Street experience to key posts. But with no action yet in key areas like tax, bank stocks have struggled to gain much further ground.