JPMorgan Chase, Citigroup Post Earnings Beat While Wells Fargo Records Loss and Cuts Dividend

Updated: Jul 17, 2020

JPMorgan Chase reports net income of $4.7 billion in their second quarter results.

Today marks the first round of big banks reporting earnings for the second quarter of 2020. JPMorgan Chase, the largest bank in the United States with nearly $2.7 trillion assets, surprises investors and analysts this morning by reporting earnings of $1.38 per share, beating estimates of $1.01. In the earnings report, the company attributes the larger than expected revenue to the increase in investing activity, with investment banking revenue up 91%.

The company also managed to see a 41% increase in deposits from their commercial banks as well as increases in loan balances. This news along with the companies stock rebounding, up nearly 6% in the last week, shows the banking giant is recovering swiftly and handling the problems presented by the pandemic much better than expected.

However not everything in the earnings report was positive, with JPMorgan Chase CEO Jamie Dimon warning, "We still face much uncertainty regarding the future path of the economy... we can continue to serve all of our stakeholders and to pay our dividend - unless the economic situation deteriorates materially and significantly".

Citigroup also announced earnings of $0.50 per share with a net income of $1.3 billion, beating estimates of $0.29 per share. Access their report here.

While JPMorgan and Citigroup experienced a positive quarter, Wells Fargo posted its first quarterly loss since 2008 with an EPS of -$0.66, amounting to $2.4 billion. This comes with more negative news as the company announced cuts to its dividend of nearly 80%, from $0.51 to $0.10 a share. In their press release, Wells Fargo CEO Charlie Scharf stated, "We are extremely disappointed in both our second quarter results and our intent to reduce our dividend... Our franchise should perform better, and we will make changes to improve our performance regardless of the operating environment".

Goldman Sachs, Morgan Stanley, Charles Schwab, and BlackRock are among the other financial institutions reporting earnings this week.

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