JPMorgan Results Underwhelm Amid Epic Bank Rally

US banks came into earnings season on a sugar high, catalyzed by higher yields and expectations for Fed hikes. The KBW Bank Index was up nearly 12% in 2022 coming into Friday (figure below). That included the best performance over the first five days of a calendar year on record as well as multiple all-time highs. Analysts were intently focused on loan growth in Q4 results. In the pandemic era, trading and investment banking delivered windfalls for Wall Street. Now, the market wants evidence o

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3 thoughts on “JPMorgan Results Underwhelm Amid Epic Bank Rally

  1. Thank you for focusing attention on the lending figures. The underpinning of the old meme that higher interest rates are good for banks is that loan margins will expand as rates rise and the yield curve steepens. Tepid loan growth should undercut that notion, but probably won’t.

    1. Citibank lending numbers were even less inspiring. Quoting Reuters:

      “While overall net interest income was flat year-over-year at $10.82 billion, NII from the bank’s basic lending business outside of markets rose 0.6%.

      Net interest margin, which measures the difference between what Citigroup pays for money and earns from loans and securities, declined to 1.98% from 2.06% a year earlier and 1.99% in the third quarter. “

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