US Banking Sector: Quarterly Results Across Major Giants
Major American banks, including JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo, entered the new earnings season with varied outcomes. Across the country, impacts from the late-2023 regional-bank turmoil—Silicon Valley Bank, Signature Bank, and First Republic—left a broad imprint. While interest-rate levels in the 5.25%–5.50% range nudged some balance sheets higher year over year, the landscape remained uneven. JPMorgan Chase, the largest U.S. bank, reported near-record annual profits approaching $50 billion, boosted in part by the First Republic acquisition. Wells Fargo posted net income near $18.0 billion for 2023, up about 43% from 2022. Citigroup faced a tough quarter, with a roughly $1.84 billion loss due to rising costs, credit charges, and weaker revenues, and Bank of America saw a modest profit dip of about 3.7% with a year-over-year rise tied to a strong year overall. In aggregate, these movements reflect a banking sector navigating higher rates and a cautious loan and credit environment. (cite: company earnings releases).
Wall Street’s first trading session of the year delivered mixed signals. JPMorgan and Wells Fargo posted some gains intraday, yet closed the day lower. JPMorgan slipped about 0.43%, Wells Fargo fell roughly 3.10%, and Bank of America dropped around 1.02%. Citigroup gained about 1.06%. Other major banks, including Morgan Stanley and Goldman Sachs, also faced declines. The Dow Jones Industrial Average inched down about 0.34%, Nasdaq slipped 0.04%, and the S&P 500 drifted 0.04% lower. (cite: market data sources).
Among the group, JPMorgan stood out for benefiting from the international economic backdrop and the higher rate regime. Net income reached approximately $158.1 billion (about €144.3 billion), up roughly 22.9% from the prior year. Provisions for loan losses rose to about $9.32 billion (€8.50 billion), up 45.9% year over year, signaling ongoing risk management amid a shifting credit landscape. The final quarter showed caution; year-end activity used about $9.31 billion (€8.49 billion), down 15.5% from a year earlier, while net revenue grew 11.7% to around $38.57 billion (€35.20 billion). Jamie Dimon, JP Morgan’s CEO, framed 2023 as an example of long-term investing discipline and client focus across cycles. The bank held cash and liquid investments totaling about $514 billion and asserted capacity to absorb large-scale losses should the regulatory environment demand it. Dimon also noted that Basel III and related policy shifts could affect consumers, companies, and markets, urging regulators to consider calibrations that preserve financial stability. (cite: annual report).
Wells Fargo delivered further improvements, reporting 2023 net income of about $18.0 billion (€16.4 billion), up 43.1% from 2022, with revenue rising 11.1% to roughly $82.6 billion (€75.4 billion). The bank recorded a credit-risk charge of $5.4 billion (€4.9 billion), more than triple the prior-year provisions, while quarterly results showed a sequential earnings uptick of about 9.8% to $3.16 billion (€2.88 billion) and revenue of $20.48 billion (€18.69 billion). A Wells Fargo spokesperson highlighted that earnings benefited from stronger macro conditions, disciplined credit settings, and robust deposit growth. (cite: earnings release).
First negative results
Bank of America, the second-largest U.S. bank, concluded 2023 with net income of about $98.6 billion (€89.9 billion), down 4.4% from the prior year and with a fourth-quarter drag of roughly $3.7 billion (€3.37 billion). The year’s total net income rose modestly, aided by an 8.5% jump in net interest income to about $56.9 billion (€51.9 billion). However, credit-loss provisions surged by 73% to roughly $4.39 billion (€4.01 billion). The quarterly weakness mainly reflected a tough fourth quarter, where net income fell 58.9% to about $2.84 billion (€2.59 billion) and annual comparisons showed pressure from late-year credit costs. The company attributed some of the year-end headwinds to new FDIC rules impacting non-financial expenses, while leadership emphasized strong organic growth across deposits and digital engagement. (cite: quarterly results).
Citigroup faced the steepest hurdle among the group. The bank posted a net loss of about $1.84 billion (€1.68 billion) for the fourth quarter, with full-year revenue slightly above $8.46 billion (€7.15 billion) but a 4.1% annual decline. Credit costs jumped 75% for the year and surged 92% in the last quarter to about $3.55 billion (€3.23 billion). The year closed with a quarterly loss driven by special charges totaling roughly $1.7 billion (€1.55 billion) tied to FDIC-related assessments and restructuring efforts. Russia and Argentina transfer risks, plus peso devaluation, added another negative overlay to Citi’s results. Plans to streamline the organization and reduce headcount were reiterated, with the CEO signaling 2024 as a turning point. (cite: annual report).
Market observers noted that legacy Wall Street banks like Goldman Sachs and Morgan Stanley would continue to hinge on investment-market performance as a backdrop for broader consumer-facing banking. The tone suggested a cautious mood for equities, even as the sector remained poised for potential upsides in a rate-sensitive environment. (cite: market commentary).