New York, Jul 14 (EFE).- JPMorgan Chase, Citigroup and Wells Fargo, three of the four largest banks in the United States by assets, presented financial results that exceeded analysts’ expectations.
JPMorgan Chase, the largest bank in the United States, obtained a profit of 27,094 million dollars (24,107 million euros) in the first half of 2023, 60% more compared to the same period of the previous year, after buying at the beginning May at balance price First Republic Bank.
As announced this Friday by the New York-based banking group, net income between January and June amounted to 81,737 million dollars, 29% more than in the first half of 2022.
Only in the second quarter, the data in which investors look the most, JPMorgan Chase earned 14,472 million dollars, 67.3% more, although excluding the positive effect of the purchase of First Republic Bank, the increase would be 40 %.
A better-than-expected economy
“The US economy continues to perform better than many expected and, although the economic slowdown is likely to continue and uncertainty to persist, it is very possible that the range of scenarios will narrow in the coming quarters,” said the top executive of the financial company. , Charlie Scharf, in a statement.
For its part, Wells Fargo closed the first half of the year with a net profit of 9,372 million dollars (8,348 million euros at current exchange rates), which represents an increase of 47% compared to a year earlier, thanks to the progressive rise of interest rates.
As detailed this Friday by the New York-based financial institution, it has managed to increase its total income by 19%, which reached 41,262 million dollars. Only those obtained by interest shot up 85% to 40,186 million.
Likewise, only during the second quarter of the year, Wells Fargo saw its income increase by 20% to exceed 20,533 million (with an advance of 80% of interest income), which in turn boosted its net profit by 57%. up to 4,938 million.
“Our powerful net interest income continued to benefit from higher interest rates,” the entity’s CEO, Charlie Scharf, has acknowledged when presenting these accounts, which also show a cut in expenses.
Indeed, the chained rises in interest rates that the Federal Reserve in the US has promoted -like the European Central Bank in its region- to curb runaway inflation is causing the income that banks obtain from what they charge their customers for lending them money.
“Modest” increase in defaults
However, the entity has warned that these increases in interest rates are also increasing the number of customers who cannot afford to pay their loans.
The manager has also detailed that, as he had already foreseen, the cancellations of loans derived from the non-payment of their holders are progressively increasing, with an advance of 48% between the first and second quarters and more than double if the comparison it is year-on-year.
In any case, the entity says that this increase is still “modest” and that it responds to “a small number of borrowers in commercial banks, with few signs of systemic weakness in the entire portfolio and higher losses in commercial real estate, mainly in the office portfolio.
Citigroup’s results, although they also exceeded market expectations, registered lower half-year profits than last year, and in fact their shares fell on the stock market when the results were known (-2.31 one after opening Wall Street).
Specifically, in the first six months of 2023 Citigroup earned 7,521 million dollars (6,702 million euros), 15% less than in the same period of 2022.
However, the group billed between January and June of this year 40,883 million dollars, 5% more year-on-year.
The company attributed these results to the impact of the costs of selling part of its business in Mexico (Banamex), which it will finally carry out in 2025 through the stock market through an initial offer.
Likewise, he pointed out the payment of indemnities in Asia, as another of the causes that weighed on the results of the second quarter.
Citigroup CEO Jane Fraser was quoted in the statement as saying that the company “continued to see the benefits of its diversified business model and strong balance sheet, despite the difficult macroeconomic context.”