Investors are increasingly concerned that the central bank will be forced to push the economy into a recession to curb rising prices.
America’s Major Banks -JP Morgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs y Morgan Stanley- announced that they reduced their benefits in the first half of 2022 compared to the first half of last year.
Those in charge of presenting the first results were, first of all, the largest bank in the United States, JP Morgan Chase, which obtained a profit of 16,931 million dollars in the first half of 2022, a 35.49% less than in the same period last yearfollowed by the investment bank Morgan Stanley, which registered a drop of 19,26% in your benefits for the first half of the year.
They were followed by Wells Fargo, the fourth largest bank in the United States in assets, which announced last Friday that in the first six months of the year it had net profits of 6,790 million dollars, which represents a decrease of 36.39% compared to the gains registered in the same period of 2021.
For its part, the Citigroup bank announced on Friday a net profit of 8,853 million dollars in the first half of the year, a 37% less than in the same period of 2021, when it reached 14,135 million, due to a higher cost of credit and higher expenses.
Bank of America, the second largest bank in the United States, published this Monday that it earned 13,314 million dollars in the first half of the year, a 22.92% less than last yearand the US financial group Goldman Sachs presented net profits of 6,866 million dollars during the first semester, a 44.27% less than in the same period of 2021.
JP Morgan and Wells Fargo posted declines in second-quarter earnings as banks set aside more funds for credit losses.
JP Morgan Chief Executive Jamie Dimon emphasized the need to build capital buffers and highlighted his concerns regarding Ukraine, high inflation and “never before seen” Federal Reserve adjustments (Fed) as threats to global economic growth.
“When you make a list of possible problems in the future… it might be a soft landing or a hard landing,” he said.
For months, Dimon has been warning that an unprecedented convergence of factors might wreak havoc on the economy.
The Fed has been raising interest rates higher and higher to try to rein in the highest inflation in 40 years.
Investors are increasingly concerned that the central bank will be forced to bring the economy to a recession to curb rising prices.
But while consumers say they are worried, they keep spendingas they are supported by a strong labor market, wage growth and the lasting effects of the monetary stimulus packages that were given to businesses and Americans during the pandemic.
If we add to this the global impacts of Russia’s war in Ukraine, a situation is produced that Dimon has cataloged as “economic hurricane” that has not hatched yet.
For its part, Morgan Stanley disappointed following a larger-than-expected slowdown in investment banking.
Nonetheless, Citigroup beat earnings expectations as it benefited from higher rates and strong business results.
Bank of America and Goldman Sachs also beat experts’ earnings expectations.
In the case of the second largest bank in the United States, it was because the lender benefited from higher interest rateswhile for Goldman Sachs it was due to fixed income traders generating more income than expected.
“Despite increased volatility and uncertainty, I remain confident in our ability to navigate the environment, dynamically manage our resources and drive long-term cumulative returns for shareholders,” David Solomon, Chairman and CEO, said in a note. Goldman Sachs CEO.