US regulators unveiled plans to propose new capital requirements half as burdensome as their original plan. But big bank executives delivered mostly tempered and cautionary comments around the uncertainty of earnings going forward at a New York conference hosted by Barclays on Last week.
JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Goldman Sachs (GS) stocks all fell last week, although selling pressure eased later in the day. (Year to date, those big bank stocks have rallied more than 12%
Bank of America
In recent weeks, the bank has also been grappling with one of its largest investors, financial giant Berkshire Hathaway (BRK-A, BRK-B) selling roughly 170 million of the bank’s shares since mid-July.
“I don’t know what exactly Berkshire CEO Warren Buffett is doing, because frankly, we can’t ask him,” said Moynihan. “But he’s been a great investor for our company and stabilized our company when we needed it at the time.”
JPMorgan’s stock fell as much as 6.8%, its biggest intraday drop since June 2020. Pinto’s comments follow those echoed by CEO Jamie Dimon and CFO Jeremy Barnum that the bank has been over-earning in recent quarters.
Goldman Sachs
CEO David Solomon said Monday that trading revenue is expected to fall 10% in the third quarter from a year ago. The firm’s profits roared back over the first half of 2024 thanks to a healthy rebound in dealmaking activity
Citigroup
Credit costs are expected to rise by $200 million from the second quarter, CFO Mark Mason said. Trading revenue in the third quarter from the bank’s market’s division is anticipated to be “down roughly 4% year over year,” driven in part by bond market volatility over the last month. The good news: Investment banking is likely “up 20% year over year,” marking four consecutive quarters of growth in that business.
Though the new proposal cuts the increase for big banks by half from the original plan drafted more than a year ago, it would still raise the capital levels of these lenders by 9% in aggregate. (Though it will likely vary between banks based on their risk profiles.)
Published on 16/09/2024
By Michael S.
