(AOF) – The results season begins under favorable auspices for American banks. Mainly benefiting from rising interest rates, JPMorgan (2.43% to $149.93), Citigroup (2.72% to $42.66) and Wells Fargo (3.20% to $41.01) exceeded analysts’ expectations in the third quarter. This progression comes even as long-term rates are falling; bonds serving as a safe haven in a tense geopolitical context in the Middle East.
In the third quarter, JPMorgan’s net profit jumped 35% to $13.15 billion, supported by higher interest income, but also by this year’s acquisition of First Republic, which had gone bankrupt early of 2023. Earnings per share came to $4.33 per share while analysts surveyed by FactSet were targeting an average of $3.95 per share.
Revenue rose 22% to $39.87 billion thanks to a 30% jump in interest income to $22.9 billion. The market was targeting $39.63 billion. Excluding First Republic, the bank’s revenues are up 15%.
The retail banking activities for individuals and small businesses (Consumer & Community Bank) particularly stood out with net profit jumping 36% to $5.9 billion. It grew by 22% excluding First Republic.
Between July and September, Citigroup’s net income increased 2% to $3.55 billion, or $1.63 per share. Adjusted earnings per share came in at $1.52, 31 cents better than expectations. Revenue rose 9% to $20.14 billion, benefiting from the 10% rise in interest income to $13.83 billion. The consensus was $19.26 billion.
Citigroup also owes its good fortune to its Institutional Clients Group division, which houses its markets business and investment bank. It saw its profit increase by 12% to $2.43 billion. Revenues from its investment banking jumped 34% to 844 million euros and those from its market activities by 10% to $4.48 billion.
Finally, Wells Fargo’s net income was $5.767 billion, or $1.48 per share, in the third quarter, compared with $3.592 billion, or 86 cents per share, a year earlier. The consensus was $1.24 per share. Revenue rose 6.6% to $20.857 billion. Interest income rose 8% to $13.1 billion while the market was targeting $12.8 billion.
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