Big Banks Are Being Challenged By Legal Expenses (And Lower Revenues)
Shares of large banks have been rattled by disappointing Q4 earnings results this week.
JPMorgan Chase & Co. (NYSE: JPM) posted lower-than-expected profits partly due to nearly $1 billion in legal charges. EPS came in at $1.19, well below expectations of $1.31 and revenue declined 2 percent to $23.6 billion.
On a conference call with reporters, JPMorgan CEO Jamie Dimon said, “We have five or six regulators or people coming after us on every different issue. It’s a hard thing to deal with.”
Bank of America’s shrinking legal bill was not enough to keep it from disappointing investors after it posted EPS of $0.25 versus expectations of $0.31. Revenue also fell short, coming in at $18.73 billion, below expectations of $20.94 billion.
Citigroup also saw its Markets and Securities Services revenues decline 9 percent to $3.0 billion.
Goldman Sachs Group Inc (NYSE: GS) is scheduled to report Q4 results Friday morning. Analysts expect EPS of $4.32 on revenue of $7.64 billion.
Based on the performance of the other large banks, investors may want to keep a close eye on Goldman's legal costs and revenue from trading activities.
Image credit: Joe Mabel, Wikimedia
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.