Three of the biggest US banks reported first-quarter earnings Tuesday, with JPMorgan and Citigroup topping Wall Street expectations on the back of surging trading revenue and strong dealmaking, while Wells Fargo beat on the bottom line but fell short on a key measure of lending profitability.
The results arrive as geopolitical tensions – most pressingly the Iran war that began in late February – have roiled global markets, pushing energy prices higher and injecting a level of volatility that has proved lucrative for Wall Street trading desks even as it clouds the economic outlook.
JPMorgan posted first-quarter net income of $16.49 billion, or $5.94 per share, a 13% increase from the same period last year and well ahead of the $5.45 analyst estimate. Revenue climbed 10% to $50.54 billion, also beating forecasts.
The firm's markets division drove much of that outperformance, generating a record $11.6 billion in quarterly revenue. Fixed income trading rose 21% to $7.08 billion, boosted by activity in commodities, credit, currencies and emerging markets. Investment banking fees jumped 28% to $2.88 billion, with mergers advisory revenue surging 82% to $1.27 billion.
Despite the strong numbers, Chief Executive Jamie Dimon urged caution. "There is an increasingly complex set of risks – such as geopolitical tensions and wars, energy price volatility, trade uncertainty, large global fiscal deficits and elevated asset prices," Dimon said. "While we cannot predict how these risks and uncertainties will ultimately play out, they are significant and they reinforce why we prepare the firm for a wide range of environments."
That echoes substantially with Dimon's recently published annual letter, which warned of threats from geopolitics, AI, and private credit strains, among other pressures.
On the consumer side, card services and auto lending revenue grew 13%, and credit card spending volume was up 9% year over year. Delinquency rates on consumer loans fell below year-ago levels, and the firm's provision for credit losses dropped to $2.5 billion – roughly half a billion less than analysts had expected and down from $3.3 billion a year ago.
Chief Financial Officer Jeremy Barnum said that despite recent market turbulence and higher gas prices, "consumers and small businesses remain resilient, with consumer spend growth continuing above last year's pace."
The bank also lowered its full-year 2026 net interest income guidance a shade to roughly $103 billion from a prior estimate of $104.5 billion.
Wells Fargo reported net profit of $5.25 billion, or $1.60 per share, up from $4.89 billion a year ago and above the $1.58 consensus estimate. However, net interest income came in at $12.1 billion, missing the $12.3 billion analysts had anticipated, and shares fell 2.8% in premarket trading – extending a year-to-date decline of about 7%.
The bank's loan book surpassed $1 trillion for the first time, an 11% increase, after the Federal Reserve lifted a $1.95 trillion asset cap last year that had constrained growth for roughly seven years. The expansion has been driven primarily by credit cards and auto loans.
Chief Financial Officer Mike Santomassimo noted that consumers are likely spending between 25% and 30% more on gas than before the conflict, though he added that "overall spend continues to be quite resilient and quite strong."
Headcount continued to shrink, falling to 200,999 employees at the end of March from 205,198 at year-end – a decline that has continued every quarter since late 2020.
Citigroup posted earnings of $3.06 per share, topping the $2.65 estimate, on revenue of $24.63 billion – the highest quarterly figure in at least 10 years and a beat versus the $23.55 billion forecast.
Total markets revenue rose 19% to $7.2 billion. Equities trading jumped 39%, while fixed income grew 13%, led by strong commodity performance. Banking division revenue climbed 15%, with equity underwriting fees up 64% and mergers advisory fees up 19%.
Return on tangible common equity hit 13.1%, above the bank's stated target of 10% to 11% and the highest level since 2021. CEO Jane Fraser said the bank remains on track to hit that target for the full year, adding that it has "entered into the final phase of our divestitures and 90% of our transformation programs are now at or near our target state."
The pressure on employees to perform has ramped up within Citi, which has reportedly set aggressive new revenue targets for its private banking staff. In a blunt January memo circulated to more than 200,000 employees, Fraser encouraged workers to "adopt a more commercial mindset," emphasizing that "we are not graded on effort. We are judged on our results."
Chief Financial Officer Gonzalo Lucchetti said the mergers pipeline "remains strong," noting the firm "started the second quarter quite well on the back of a few large transactions that were moved from the first quarter into the second." He cautioned, however, that a prolonged Middle East conflict could weigh on dealmaking activity in the second half of the year.
Expenses rose 7%, partly due to severance costs tied to the bank's ongoing restructuring. Citigroup's stock has gained roughly 105% over the past 12 months, outpacing broader banking indexes.
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