The U.S. banking sector’s earnings season started on a weak note. The market shows a negative reaction to the results reported on Friday by JPMorgan Chase & Co. JPM, Bank of America Corp. BAC, Citigroup Inc. C, Wells Fargo Company WFC, and Bank of New York Mellon Corp. BK.
A basket of the 24 largest U.S. banking stocks — as monitored by the Invesco KBW Bank ETF KBWB — declined by 1.4% at midday trading in New York.
This marks its fourth consecutive day of negative closing — the worst streak since early November 2023.
The broader U.S. financial sector, as tracked by the Financial Select Sector SPDR Fund XLF, also saw a decrease of 0.3%.
Wells Fargo & Company, Western Alliance Bancorporation WAL, Zions Bancorporation ZIONS, and Citizens Financial Group, Inc. CFG were among the worst performers in the banking sector for the day, each experiencing declines of more than 3%.
How Did US Banking Report In Q4 2023?
| Name | Adj. EPS | Estimated EPS | Surprise % EPS | Revenue ($bn) | Estimated Revenue ($bn) | Surprise % Revenue |
|---|---|---|---|---|---|---|
| Citigroup | 0.84 | 0.81 | 3.7% | 17.440 | 18.741 | -6.94% |
| Bank of America | 0.70 | 0.68 | 2.9% | 23.500 | 39.778 | -1.03% |
| JPMorgan Chase | 3.97 | 3.32 | 19.6% | 39.943 | 39.943 | 0.42% |
| Wells Fargo | 0.86 | 1.17 | -26.5% | 20.478 | 20.300 | 0.88% |
| Bank of New York Mellon | 1.28 | 1.13 | 13.3% | 4.461 | 4.294 | 3.9% |
- Citigroup reported adjusted earnings per share (EPS) of $0.84, surpassing estimated EPS by 3.7%. However, the bank’s revenue fell short of expectations, with a negative surprise of -6.94%. See: Citigroup Navigates Tough Quarter with Revenue Dip, Plans Major Job Cuts
- Bank of America exceeded expectations with an adjusted EPS of $0.70, beating estimated EPS by 2.9%. Nevertheless, the bank missed revenue estimates by -1.03%, reporting revenue of $23.50 billion. See: Bank of America’s Q4 Revenue Dips 10%; CFO Highlights Organic Growth, 4.6M Credit Card Accounts Addition
- JPMorgan Chase reported a significant positive surprise in adjusted EPS, with $3.97 compared to an estimated $3.32, representing a 19.6% surprise. Their revenue broadly matched expectations, with no significant deviation. See: JPMorgan Q4 Earnings Shine, Sees Strong FY24 NII But Warns Of Potential Risks
- Wells Fargo reported adjusted EPS of $0.86, falling significantly short of the estimated EPS of $1.17, resulting in a -26.5% surprise. However, the bank’s revenue slightly exceeded expectations, with a positive surprise of 0.88%.
- Bank of New York Mellon outperformed both in terms of adjusted EPS, beating expectations by 13.3%, and revenue, surpassing estimates with a positive surprise of 3.9%. Their adjusted EPS was $1.28, while revenue reached $4.461 billion.
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