Bank of America, Wells Fargo, and other banks report strong profits

Morgan Stanley’s profit reached $ 3.7 billion with the help of its stock traders, which boosted stock income by 24%. Citigroup, where stock trading was also a bright spot, reported a profit of $ 4.6 billion. Trading divisions, which were expected to lag, fared better than expected overall as a lively stock market helped offset weaker performance in bond trading.

“The recovery from the pandemic continues to boost business and consumer confidence,” Jane Fraser, CEO of Citigroup, said Thursday.

At Wells Fargo, which has smaller Wall Street operations than its peers, profit was $ 5.1 billion, also beating analyst estimates. The lender has cut spending, in part by closing 433 of its branches, or 8%, in the past year and downsizing 13% to just over 114,000 employees.

Wells Fargo chief executive Charles W. Scharf said the bank is still focused on solving the types of issues that have been holding it back for several years. Wells Fargo was fined $ 250 million for its mortgage practices and received a scathing reprimand from a banking regulator last month, which drew further criticism from Massachusetts Democrat Senator Elizabeth Warren.

The fine was the latest in a series of sanctions the bank has faced for its conduct, including a fake accounts scandal that spanned more than a decade. Mr Scharf said in a statement on Thursday that the sanction was “a reminder that the significant shortcomings that existed when I arrived must remain our top priority”.

Wells Fargo shares fell 1.5% on Thursday as investors focused on maintaining regulatory sanctions, including a bank growth cap imposed by the Federal Reserve more than three years ago. Shares of Bank of America were up 4.5%, Morgan Stanley 2.5% and Citi just under 1%. JPMorgan, the country’s largest bank, gained 1.5% per day after also beating expectations with a profit of $ 11.7 billion.

Profits from Bank of America, Wells Fargo and Citigroup included funds released from stocks they had built up at the start of the pandemic to guard against an increase in defaults that never materialized. Wells Fargo released the most – $ 1.7 billion – while Citigroup released $ 1.2 billion and Bank of America released $ 1.1 billion. Morgan Stanley instead slightly increased its provisions for credit losses.

Goldman Sachs, the last of the big banks to release a report for the quarter, will release its results on Friday.

Matthew Goldstein contributed reports.

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