Profits drop at JPMorgan, Citi but jump at Wells

The U.S.’ biggest banks kicked off earnings season Friday with mixed results. Quarterly profits dropped at JPMorgan Chase and Citigroup, but Wells Fargo bucked the trend.

A slowdown in its trading business contributed to the 14% profit decline at JPMorgan. But a surge in investment banking revenue at the U.S.’ largest bank cushioned that shortfall, enabling earnings to beat analysts’ expectations.

Although a potential Omicron-induced economic slowdown and rising inflation could challenge the growth of the banking sector, CEO Jamie Dimon voiced optimism, saying – in his words – “The economy continues to do quite well.”

Citi’s profit sank 26% as higher operating costs bit into its bottom line. Selling its consumer businesses outside the U.S. added to expenses.

But profit at Wells Fargo nearly doubled, topping Wall Street’s targets. It was propped up by a one-time gain: the bank had sold its corporate trust and asset management units. Investors rewarded Wells Fargo, sending its shares higher in early trading Friday but driving down shares of JPMorgan and Citi.

Rate-sensitive bank stocks have been stellar performers this year spurred by expectations of several interest rate hikes.

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