Earning season continues – US banking giants report Q3 results

The third quarter earnings season is heating up nicely over in the US, with some of the world’s largest banks reporting their latest financial results. Morgan Stanley, Bank of America Corp, Citigroup, and Wells Fargo & Co reported their numbers before the opening bell on Thursday.

Morgan Stanley

The company reported total revenue of $14.75 billion in Q3 beating analyst forecast of $14 billion. Earnings per share reported at $1.98 per share vs. forecast of $1.68 per share.

James Gorman, Chairman and CEO, commented on the latest financial results: ”The Firm delivered another very strong quarter, with robust revenues and improved efficiency producing an ROTCE of 20%. We had standout performance of our integrated Investment Bank and record net new assets of $135 billion in Wealth Management. Year-to-date, our successful integrations of E*TRADE and Eaton Vance have supported growth of $400 billion in net new client assets across Wealth and Investment Management, bringing our total combined client assets to $6.2 trillion.”

Shares of Morgan Stanley ended the trading day up by 2.48% at $101.01 per share. The stock is up by 99.43% in the last year.

Bank of America

Bank of America also topped analyst expectations. Total revenue was reported at $22.87 billion vs. $21.80 forecast. Earnings per share at $0.85 vs. $0.71 per share forecast.

Chairman and CEO Brian Moynihan on the Q3 results: “We reported strong results as the economy continued to improve and our businesses regained the organic customer growth momentum we saw before the pandemic. Deposit growth was strong and loan balances increased for the second consecutive quarter, leading to an improvement in net interest income even as interest rates remained low.”

“For our shareholders, we returned nearly $12 billion in capital this quarter, while continuing to support clients and communities. The team has done a remarkable job, and I couldn’t be prouder of how they stepped up to support our clients and deliver another quarter of outstanding results.”

Bank of America trading higher after the trading day on Thursday, up by 4.47% at $45.07 per share. The share price has climbed up by 90.81% in the last year.

Citigroup

Citigroup reported total revenue of $17.15 billion in the third the quarter vs. $16.97 billion expected. Earnings per share also beat analyst estimates at $2.15 per share vs. $1.65 per share expected.

“The recovery from the pandemic continues to drive corporate and consumer confidence and is creating very active client engagement as you can see through our strong results in Investment Banking and Equity Markets, both up approximately 40% year-over-year, in addition to double digit fee growth in Treasury and Trade Solutions as we help our clients reposition their supply chains. And while strong consumer balance sheets have impacted lending, we are seeing higher consumer spending across our cards products. We also continue to show momentum in deposits and wealth management AUM as well as growing engagement across our digital channels. Overall, our revenues were 3% higher than last year excluding the impact of the sale of our consumer business in Australia,” Jane Fraser, Citi CEO commented on the latest financial report.

Share price of Citigroup was little changed at the end of the trading day on Thursday, trading at $70.80 per share. The stock is up by 64.54% in the past year.

Wells Fargo & Co

Wells Fargo also beat analyst estimates with total revenue of $18.83 billion in Q3, just above analyst forecast of $18.35 billion. Earnings per share at $1.22 a share vs. $0.99 per share expected.

Charlie Scharf, CEO commented on the quarter results: ”The actions we’re taking to improve operating effectiveness and financial returns are coming through in our results, in addition to the benefits we’re experiencing from the economic recovery. We recorded a $1.7 billion pre-tax reduction in the allowance for credit losses and had strong equity gains. More importantly, charge-offs were low, net interest income stabilized and period-end loans grew for the first time since first quarter 2020. Expenses continued to decline as we made progress on our efficiency initiatives, and we increased our capital return to shareholders by repurchasing $5.3 billion of common stock and increasing our dividend.”

Despite the positive results, share price finished the trading down by 1.61% at $45.31 per share. Well Fargo is up by 94.88% in the past year.

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Sources: Morgan Stanley, Bank of America, Citigroup, Wells Fargo & Co, Refinitiv