Three Big US Banks report spectacular profits
Despite the recent crisis of confidence in the banking industry, JPMorgan Chase, America's largest bank, reported a 52% increase in first-quarter profit, along with record revenue.
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Following the collapses of Silicon Valley Bank and Signature Bank, panic depositors fled midsized banks, resulting in JPMorgan receiving approximately $50 billion in new deposits, while Citigroup raised around $30 billion. All three banks reported profits of more than $22 billion, up more than a third from the previous year. Total revenue was more than $80 billion, up 19% from the previous year. Nevertheless, the expected decline in lending and book losses on bank bond portfolios could limit returns on investment for shareholders.
While the larger group of banks' profits compared to the previous year stemmed from the same cause that led to the crisis, the rising interest rates, the threat of ever-growing cash outflows has led many banks to raise interest rates on depositors. Funding uncertainty means that bank loan officers will likely have to withdraw new credit offers, eating into the profits that banks make from lending. After the collapse of smaller banks, midsize banks' median net interest income estimate was lowered to 7.1%, benefiting big banks. Despite their success, concerns about the health of the hot economy persist. Furthermore, customers large and small are struggling with their own doors closing. Many Americans began delaying their auto loans and credit card payments last year, pressured by higher interest rates and prices on staples like food and gasoline. At all three banks, credit card delinquency has increased from a year ago, and more borrowers carry more balances each month.
Three Big US Banks report spectacular profits
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