US banks earnings preview: What to expect from JPMorgan and BofA?

JPMorgan's revenue is expected to rise by 11.8% to $39.8 billion, boosted by the ongoing integration of First Republic Bank into its business. In the last twelve months, JPMorgan performed better than its US peers, gaining around 27% in the period. Since the very end of October, JPMorgan shares have been almost constantly rising, setting a new all-time high last Thursday. Meanwhile, Bank of America’s EPS is anticipated to fall by nearly 20% to 68 cents and revenue is also expected to decline 2.6% to $24 billion. Wells Fargo and Citigroup are the other two banks due to report on Friday. Goldman Sachs and Morgan Stanley will report on Tuesday 16 January. IGTV’s Angela Barnes has the details.

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JPMorgan earns slightly less per share, but revenue increases

This Friday, there will be an announcement about how well major US banks performed in the last quarter of 2023. JPMorgan, one of the biggest banks, is expected to say that it earned $3.53 for each share, which is a little less than what it made in the same quarter the year before. However, its revenue, which is the amount of money it made, is predicted to go up by 11.8% to $39.8 billion. This increase is mainly because JPMorgan bought another bank called First Republic Bank. JPMorgan has actually done better than other banks in the last year, with its shares going up 27% since the end of October. In fact, last Thursday, JPMorgan's shares reached an all-time high.

Bank of America underperforms in 2023

On the other hand, Bank of America, another big bank, is expected to earn $0.68 for each share, which is about 20% less than before. Also, its revenue is predicted to go down by 2.6% to $24 billion. Bank of America didn't do very well in 2023, only gaining 0.9% while other banks did better. One reason for this is that it struggled more after a banking problem in the US in March 2023. However, even though Bank of America didn't do well, its stock went up a lot - 37% since the end of October. It's now at the highest point it's been in 10 months.

US Treasury bonds yield drops

In the last part of 2023, the amount of money that investors earn from bonds went down as more people thought that interest rates would be cut. The yield from the US Treasury bonds, which is how much money you get from them, dropped from 5.02% to just over 4% now. This drop in yields might help the banks because it means that they don't have to pay as much to borrow money.

In addition to JPMorgan and Bank of America, there are two other banks, Wells Fargo and Citigroup, that will also tell us how they did on Friday. Then, on Tuesday 6 January, Goldman Sachs and Morgan Stanley will talk about their earnings.