Benzinga - by Piero Cingari, Benzinga Staff Writer.
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. (NYSE:JPM), Bank of America Corp. (NYSE:BAC), Citigroup Inc. (NYSE:C), Wells Fargo Company (NYSE:WFC), and Bank of New York Mellon Corp. (NYSE:BK).
A basket of the 24 largest U.S. banking stocks — as monitored by the Invesco KBW Bank ETF (NYSE: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 (NYSE:XLF), also saw a decrease of 0.3%.
Wells Fargo & Company, Western Alliance Bancorporation (NYSE:WAL), Zions Bancorporation (NASDAQ:ZIONS), and Citizens Financial Group, Inc. (NYSE: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.
Now Read: Wells Fargo’s 2023 Profit Rises 9% Buoyed By Higher Interest Rates, But Warns Lower Net Interest Income For 2024
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