Results show a mixed picture for US banks

The big US banks saw differing fortunes this week as they announced their latest results, with many experiencing a drop-off in trading.

Results show a mixed picture for US banks

Bank of America reported a net profit of $4.07bn for the three months to the end of September against a loss of $470m a year earlier.

Wells Fargo reported its first profits rise for three quarters helped by its acquisition of commercial loans from General Electric earlier this year. Its net income rose 0.65% from a year ago to $5.44bn in the three months to the end of September with revenues up 3% to $21.9bn.

JP Morgan Chase also reported higher profits in the three months to September but still missed analysts’ expectations. It posted a net income of $6.8bn, up from $5.5bn during the same period last year. But net revenue was $23.5bn, down from $25bn the year before.

“We had decent results this quarter,” said Jamie Dimon, chairman and CEO of JP Morgan. “We saw the impact of a challenging global environment and continued low rates reflected in the wholesale businesses’ results while the consumer businesses benefited from favourable trends and credit quality.

“Overall, our risk management discipline and diversified platforms across the businesses are serving us well.

“We continue to focus on our commitments, optimize our balance sheet and manage our expenses. We are also building the businesses for the future, dedicating resources to controls, cybersecurity and technology.”

Revenues at Citigroup fell by 5% to $18.69bn but the bank’s cost-cutting programme meant it posted a 50% jump in profits to $4.29bn.

Finally Goldman Sachs reported a fall in profits, seeing net profits of $1.43bn for the three months to 30 September, down more than a third on a year earlier. Revenue fell almost 20% to $6.9bn.

“We experienced lower levels of activity and declining asset prices during the quarter, reflecting renewed concerns about global economic growth,” said Lloyd C. Blankfein, chairman and chief executive officer at Goldman Sachs.

“We continue to see strong levels of activity in investment banking and growth in investment management, and looking ahead, are encouraged by the competitive positioning of our global client franchise. Our focus on serving our clients and improving operating leverage puts us in a strong position to generate superior returns for our shareholders.”

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