US Banks See Lower Profits
Recession may be coming as banks' profits are coming down. Yet, even as the profits are down, notice that high interest rates are helping them also. In other words, head or tail, most of these banks win.
The nation’s biggest bank set aside an additional $808 million for potential loan losses in the last quarter amid ample warnings by CEO Jamie Dimon about an impending recession. JPMorgan saw profit slide 17% from a year earlier, to $9.74 billion, because of the financial sandbagging and losses related to securities it held. The bank’s revenue, meanwhile, jumped 10% on the back of rising interest rates. Meanwhile, profit at Wells Fargo dropped 31% from a year earlier, to $3.53 billion, as it set aside an additional $2 billion to settle legal woes stemming from a decade-old fake accounts scandal.
Profit fell 25%, to $3.48 billion, at Citigroup; and 29%, to $2.63 billion, at Morgan Stanley — as rising interest rates chilled stock and debt sales at the banks.
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