U.S. banks report blowout profits
Blowout earnings from three of the top U.S. banks. JPMorgan Chase’s quarterly net income nearly quintupled to $14.3 billion. Goldman Sachs’ jumped 6-fold. And Wells Fargo’s profit catapulted 7-fold.
Setting aside less money to cover sour loans as the economy rebounded from the pandemic helped beef up the bottom line at the three lenders.
O’Neil Global Advisors Chief Investment Officer, Randy Watts:
“Banks took a lot of loan loss reserves last year around this time. Loan quality has actually been better than they expected, so some of those loan loss reserves are going to get reversed and flow back into the income statement.”
Big jumps in investment banking and trading revenue also boosted profit at JPMorgan and Goldman. A surge in initial public offerings featuring private firms merging with listed shell companies kept investment bankers busy.
And the retail trading frenzy centered on so-called “meme stocks” like GameStop helped drive trading revenue up 57% at Goldman and 37% at JPMorgan.
JPMorgan CEO Jamie Dimon voiced optimism, saying, “We believe that the economy has the potential to have extremely robust, multi-year growth.” His bank is seen as a barometer of the health of the U.S. economy.
Shares of Goldman Sachs rose in early trading Wednesday while JP Morgan and Wells Fargo fell slightly.
