BofA, Citi Wrap Up Another Quarter Of ‘God’s Work’

Big bank results have come and gone, and things went pretty well all things considered.

BofA and Citi rounded out Wall Street earnings Tuesday with some decent numbers and beats where it counted.

At the House of Moynihan, net interest income in Q1 was $14.59 billion, ahead of estimates, flat from Q4 and up 2% YoY.

By year-end, NII should reach $15.5 billion to $15.7 billion, the bank reiterated. If you’re curious, a 100bps shift in the forward curve would result in NII that’s $2.2 billion lower over the next 12 months.

As was the case at JPMorgan, Morgan Stanley and Goldman, trading results at BofA and Citi were solid. Volatility’s good for business.

Equities brought in $2.2 billion at BofA, a record. Consensus expected $2.05 billion. The bank cited “increased client activity.” At Citi, the equities haul was $1.51 billion, up 23% YoY and easily ahead of estimates.

As noted here on Monday, beats in equities trading was the common thread across Wall Street in Q1. The figure just shows each bank’s trading haul, with annotations for the YoY increase in stock trading revenues.

Total markets revenue at Citi was $6 billion against $5.74 billion expected. At BofA, it was $5.65 billion, basically in line (FICC was a little weak for Moynihan).

The provision at BofA was $1.48 billion, less than expected. At Citi, the set-aside was $2.7 billion, considerably larger than expected and up 15% YoY.

Alastair Borthwick said consumers are still signaling the US economy’s in “good shape.” Brian Moynihan described households as “healthy” on the “credit quality” front. I suppose they’d know, but… well, consumer sentiment surveys tell a different story. As long as people are still spending, I guess it doesn’t matter what they tell pollsters. Later, Borthwick said revolver use ticked up among commercial clients.

Moynihan subtly suggested Americans steel themselves. “We potentially face a changing economy in the future,” he mused. For her part, Jane Fraser braved a sweeping assessment. “When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the US will still be the world’s leading economy, and the dollar will remain the reserve currency,” she said. (Thanks Jane, I feel better already.)

Running quickly through the rest of the key line items, IB was short at BofA ($1.52 billion versus $1.55 billion expected), but the bank said the pipeline’s “good.” Total deposits of $1.99 trillion topped estimates, non-interest expenses were high ($17.77 billion versus $17.62 billion seen), wealth management revenue of just over $6 billion was a beat and total revenue of $27.4 billion blew away consensus, which saw $25.8 billion.

At Citi, NII of $14.01 billion beat handily ($13.68 billion seen), personal banking revenue of $5.23 billion was a touch light (but still a record), credit costs were higher than expected at $2.72 billion, IB managed a beat with revenue of more than a billion against estimates of $940 million, wealth chipped in $2.1 billion, total deposits were $1.32 trillion and overall revenue was $21.6 billion. EPS of $1.96 easily beat.

And, so, that’s it for Wall Street. Another quarter of “God’s work” come and gone.


 

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2 thoughts on “BofA, Citi Wrap Up Another Quarter Of ‘God’s Work’

  1. Credit losses seem high as a percent of revenues. And considering the sentiment – and reality of futre jobs – they look dangerous. Are they ready for negative GDP?

  2. I can well believe BAC’s customers weren’t much affected by the 4/2 tariff shock during the Jan-Mar quarter 🙂

    I also can believe that BAC is prepared for a downturn – it’s stress test assumptions are severe.

    Doesn’t mean the stock will shrug off a downturn, but the big banks are probably among the less exposed groups.

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