From Quiver Quantitative:

U.S. banks are expected to report a decline in fourth-quarter profits due to increased reserves for bad loans and higher payouts to depositors. Net interest income is anticipated to drop by 10% on average, and trading revenue is expected to fall by 15%. Major banks like JPMorgan, Bank of America, Citigroup, and Wells Fargo are all preparing to release their financial results. Citigroup and Morgan Stanley are expected to see a drop in earnings per share, while Wells Fargo may see a slight improvement due to cost-cutting efforts. Additionally, banks are bracing for stricter regulatory requirements and potential changes in the regulatory landscape ahead of the U.S. presidential election.

It’s also expected that NII declines in Q4 could continue into the first half of 2024. Regulation changes, as well as a closer look at JPMorgan, Wells Fargo, Citigroup, and Morgan Stanley’s restructuring and new CEO strategy under Ted Pick, are on investors’ radars as banks face economic uncertainties and delinquencies among lower-income customers.

Overall, 2023 bank profits remained resilient against a backdrop of macroeconomic uncertainty. However, the decline in NII seen in the last quarter is expected to extend. With the potential stricter regulatory requirements and the upcoming U.S. presidential election influencing banks’ future behaviors, capital management and share buybacks are expected to be cautious.



Read more: Major U.S. Banks Brace for Profit Hit Amid Loan Challenges