JP Morgan Asset Management Global Markets Strategist
US bank profits are expected to rebound
Major US banks are set to report a significant rebound in quarterly earnings this week. Large loan losses, once feared, never materialized. JPMorgan Chase, Bank of America, Wells Fargo and Citigroup had set aside a total of $ 33 billion to cover loans that could go unpaid. But thanks to the government’s extraordinary stimulus measures and loan repayment holidays, that never happened. Now, with Main Street reopening and Americans returning to some sense of normalcy, the Big Four could set aside as little as $ 1 billion for potential bad debt in the second quarter. This is not the only good news for the industry at the moment. Banks have racked up huge fees for takeovers, IPOs and the latest stock market craze: SPACS, the specialized acquisition companies that allow start-ups to go public without the traditional route of IPOs. stock Exchange. Overall, the Big Four are expected to post a combined profit of $ 24 billion in the second quarter, down from just $ 6 billion in the same period a year ago. But there are potential drawbacks that could be more annoying than expected. While the bulk of consumer loans have not gone unpaid, lending activity is far from booming with a decline in credit card use. And business income, which has skyrocketed last year. during a period of wild volatility, are likely to have also fallen. JPMorgan and Goldman Sachs will kick off the earnings season before the market opens on Tuesday.