Four of the largest banks in the United States presented this Friday healthy results for the first quarter of the year, in particular thanks to the increase in interest rates, without being too affected by the recent financial turmoil.
Likewise, they are prudent: JPMorgan Chase made an additional provision of 1,100 million dollars to prevent eventual non-payments by its clients, due to the
deterioration of the "economic prospects".
Some banks warn that they could lend a little less to individuals and companies, in this context.
But the US economy "remains in good shape as a whole," estimated influential Jamie Dimon, chairman of JPMorgan.
"Consumers continue to spend and have strong balance sheets, and businesses are in good health," he said.
Citibank headquarters in New York.
It also showed positive results so far this year.
Photo: AP
Entities with "good health"
The banks presented their results on Friday, opening the season.
Among the main ones are JPMorgan, Citigroup, Wells Fargo and PNC, which benefited from the sharp rise in interest rates that the Federal Reserve (Fed, central bank) has been promoting for a year to fight inflation.
This situation causes, almost mechanically,
an increase in their net interest income
, that is, the difference between the interest they earn by lending money and the interest they pay to savers who deposit their money.
The big banks have recognized that they have gained
new customers
who prefer to put their money in large banks in the sector, considered too important to fail, rather than in smaller banks, after the failures of Silicon Valley Bank and Signature Bank, and the liquidation of from another regional bank, Silvergate.
The debacle of these medium-sized banks, with an especially regional scope, was fueled by
massive withdrawals of money
by clients alarmed by signs of weakness.
"We had a tough period in March," JPMorgan Chief Financial Officer Jeremy Barnum acknowledged during a conference call.
But "the system as a whole is in very good health," he said.
His peer at Citigroup, Mark Mason, expressed himself in the same terms.
The head of the Federal Reserve (Fed), the US Central Bank, Jerome Powell, announced a new rate hike in March.
Photo: AFP
"We are in a very different situation and health" than in 2008, when the financial crisis linked to mortgage loans occurred in the United States, which had a global reach.
Industry bigs managed "in a short time" to raise $30 billion to help First Republic in mid-March, "which clearly demonstrates our strength in terms of capital and balance sheet," Mason said.
"We are happy to have been in a position to help sustain the US financial system during the recent events that affected it," summed up Wells Fargo number one Charlie Scharf.
record earnings
Billings at JPMorgan, the largest US bank by volume of assets,
rose 25% to a record in the first quarter.
That of Citigroup, the third largest bank in the country, increased 12% "despite the challenging environment for banks," said its president, Jane Fraser.
JPMorgan registered
an increase in its profits of 52%
to 12.6 billion dollars in the period considered in comparison with the same quarter of 2022.
Wells Fargo posted 34% higher profits to $4.7 billion, Citigroup 7% higher at $4.6 billion, and PNC was up 18% at $1.6 billion.
The results were very well received by Wall Street, where banks rose on the stock market, with JPMorgan leading the way with a 7% rise at 1430 GMT.
Following the March stresses, "financial conditions will probably get tighter, financiers will get more prudent, and we don't know if that will affect consumer spending," Jamie Dimon mused.
Therefore, to face impact risks, particularly for mortgage loans for commercial facilities or credit cards, like JPMorgan, Wells Fargo reserved additional money of 643 million dollars and Citigroup 231.
Source: AFP
BC
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