The biggest banks in the US are getting ready to announce some pretty rough earnings for the third quarter. It’s all about shrinking profits and a battle for margins.
Earnings Forecast: A Sea of Red
- JPMorgan Chase and Wells Fargo are kicking things off this Friday. JPMorgan is expected to see a nearly 8% drop in earnings per share, while Wells Fargo is looking at a nearly 14% drop.
- Next week, it’s a similar story: Bank of America is expected to report a 14% drop, Citigroup a 20% drop, and Goldman Sachs a whopping 35% drop.
What’s Behind the Pain?
The main culprits are:
- Rising deposit costs: Banks are paying more to keep your money in their accounts.
- Weak loan demand: People aren’t borrowing as much as they used to.
- Shrinking net interest income (NII): The difference between what banks earn on loans and what they pay on deposits is getting smaller.
A Silver Lining?
Even though things are looking tough, there’s a bit of good news.
- Investment banking and trading: Banks are expected to make good money from these areas.
- Strong consumer loan performance: Delinquencies are down, and banks have set aside plenty of money to cover potential losses.
Overall, the outlook is mixed. While banks are facing some headwinds, they’re also finding ways to stay afloat. It’s going to be interesting to see how the rest of the year plays out. /p>
