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What Bank Earnings Tell Us About the Economy


Wall Avenue is booming, or not less than elements of it are. Merger mania and inventory buying and selling lifted the large U.S. banks’ third-quarter outcomes. On Predominant Avenue, banks are nonetheless attempting to find larger mortgage progress, however many purchasers are spending extra after holding out final yr.

Right here’s what the most important U.S. banks are telling us in regards to the state of the financial system.

Spending

Buyer spending has eclipsed pre-pandemic ranges, financial institution executives mentioned, a development they see persevering with into the vacations. Spending on

Citigroup


C 0.68%

bank cards jumped 20% from a year ago to a document. Late charges are up and extra individuals are beginning to carry balances. Executives mentioned they had been again to combating for card prospects.

“That may be a great quantity of spending that’s happening,” mentioned

Bank of America


BAC 4.14%

Chief Government

Brian Moynihan,

“and it’s accelerating.”

Lending

A still-fragile financial system and wide-open debt markets have reduce into demand for financial institution loans throughout the pandemic. At

Wells Fargo


WFC -2.25%

and Financial institution of America, complete excellent loans had been down from a yr in the past however up from the second quarter.

“All of us dream of quicker mortgage progress,”

Mike Santomassimo,

Wells Fargo’s chief monetary officer, mentioned on a name with analysts.

One mortgage class, securities-based lending, is rising quickly. Each Bank of America and

Morgan Stanley


MS 2.52%

posted double-digit growth in loans to shoppers borrowing against their stock-and-bond portfolios.

Buying and selling

Frenetic markets boosted massive U.S. banks by means of a lot of the coronavirus pandemic. Now, fairness buying and selling remains to be up, however fixed-income buying and selling is slowing. Morgan Stanley and Financial institution of America each notched positive aspects in total buying and selling income.

JPMorgan


JPM 1.47%

Chase & Co., Citigroup and Wells Fargo reported decrease buying and selling income.

Buyers have been making an attempt to determine the brand new “regular” degree of buying and selling. The third quarter may be proof that markets income will keep increased than beforehand anticipated on the massive U.S. banks, partly as a result of they’re profitable extra enterprise from worldwide rivals, mentioned

Kush Goel,

a senior analyst at investor Neuberger Berman.

Offers

A global deal bonanza continued to mint cash for banks’ Wall Avenue operations. JPMorgan, Morgan Stanley, Financial institution of America and Citigroup all reported document quarters for mergers-and-acquisitions charges.

Goldman Sachs’s


GS 0.94%

league-leading workforce is because of report Friday. Executives mentioned pipelines for potential future offers stay full. That may be a signal firm executives are assured sufficient within the financial system to aim transformative offers.

Wall Avenue Banks’ Quarterly Report

Write to David Benoit at [email protected], Ben Eisen at [email protected] and Orla McCaffrey at [email protected]

Copyright ©2021 Dow Jones & Firm, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8


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