With many companies’ quarterly earnings coming out this week and in the following ones, they’ll certainly be featured prominently in Phi Fiscal. One sector of note that reported its earnings this week is the financial sector, with companies like JP Morgan Chase, Bank of America, Goldman Sachs, Blackrock, etc reporting their earnings. Here’s a highlight of some of the most important ones.
JP Morgan Chase beat revenue and earning expectations of $50.99 billion to $49.87 billion and EPS of $4.26 vs. $4.26. In the process, they increased revenue by 20% year over year, with investment banking revenue increasing 46% and equities trading revenue growing by 21% from last year. However, profit declined 9% year over year, in part due to a slow 4% growth in net interest income(NII), which is the income made from the interest on loans minus the interest paid to depositors. This metric is vital for banks because loans make up the foundation of their business, with NII accounting for $22.7 billion in revenue.
Bank of America also beat revenue and earning expectations of $50.99 billion to $49.87 billion and EPS of $0.83 vs. $0.80. However, BofA saw its revenue fall 1% and profits drop 7% from last year, although 29% growth in investment banking fees and 14% in asset management fees helped soften the blow. The all important net interest income dropped 3% to $13.86 billion, although BofA said that its NII would increase in the near future.
Wells Fargo also beat expectations but saw a 9% drop in NII, falling below analyst expectations and causing its stock to tumble.
Goldman Sachs saw revenue rise 17% and net earnings increase 148% annually. Major contributors to this growth were investment banking fees, which grew 21% annually, and asset management revenues, which increased 27%.
Blackrock reported an 8% growth in revenue and 11% growth in profit year over year. Additionally, it saw a 13% increase in AUM annually. Blackrock’s AUM growth is relevant because it generates much of its revenue through fees from AUM.