JPMorgan earnings prove strong, but Wells Fargo falls flat
Earnings reports from big banks reporting Thursday, such as JPMorgan Chase and Wells Fargo, were being closely watched by Wall Street, as their results will set the tone for the entire first-quarter earnings season.
JPMorgan Chase reported strong first-quarter results, topping Wall Street’s forecasts for earnings and revenue handily, and the bank’s CEO Jamie Dimon gave an upbeat assessment of U.S. consumers and businesses.
The nation’s largest bank by assets reported a 17% rise in net income of $6.4 billion and earnings per share of $1.65, beating analysts forecast of $1.52 by 13 cents, according to Thomson Reuters. Revenues came in stronger than expected at $25.6 billion, up 6% from last year’s first quarter and above estimates of $24.9 billion.
“We are off to a good start to the year,” Dimon said in a statement, adding all of the bank’s segments were “building on their momentum from last year.”
The stock, which surged 23% from Election Day to the end of 2016, has traded flat so far this year and started Thursday’s session off 1% in 2017.
Wells Fargo reported flat firstquarter profits Thursday amid increased costs and lower mortgage banking income as the bank continued efforts to move beyond its scandal over unauthorized customer accounts.
The results prompted financial analysts to pepper Wells Fargo officials with questions about recovery plans and sent the bank’s shares 3.3% lower Thursday.
The bank has struggled with its reputation since September, when the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the Los Angeles City Attorney’s office hit Wells Fargo with $185 million in penalties for opening as many as 2.1 million accounts that may not have been authorized by customers.
Bank employees opened the checking accounts, credit cards, debit cards and other financial products under pressure from bosses to meet aggressive sales targets that helped Wells Fargo outdo other major banks with steady growth and profits.