The financial sector in the US is gearing up to report third-quarter earnings, with some of the biggest banks in the country expected to see a decline in profits. JPMorgan Chase and Wells Fargo are set to release their earnings on Friday, with projections showing a drop in earnings per share for both banks.
According to data compiled by the London Stock Exchange Group (LSEG), JPMorgan is expected to reveal an almost 8% decrease in earnings per share, while Wells Fargo is likely to report a nearly 14% drop in earnings per share. The trend of declining profits is expected to continue next week, with Bank of America projected to report a 14% drop, Citigroup a 20% drop, and Goldman Sachs a 35% drop in earnings per share.
The decrease in profits can be attributed to a combination of factors, including rising deposit costs, weak loan demand, and shrinking net interest income (NII). Despite these challenges, banks are anticipated to see strong revenues from other divisions such as investment banking and trading.
Analysts at Oppenheimer have noted that consumer loan delinquencies are on the decline, and banks have bolstered reserves to cover potential losses from office loans. Additionally, the industry is expected to see a 7% increase in investment banking revenues on average. However, trading revenue may experience a decline due to a seasonal drop in volume.
As the financial sector navigates through these challenges, it is important for investors to stay informed and up-to-date with the latest developments. Subscribing to email alerts, checking price action, and following news on platforms like Twitter, Facebook, and Telegram can help investors make informed decisions. Stay tuned for more updates on the financial sector and how banks are adapting to the changing market conditions.