Advanced Theory & Practice of Bonds

Recognized under IBF-FTS | 7-8 June 2022 | 12 CPD Hours

Comprehensive 2-day course on bonds designed for private bankers, wealth managers and advisors.

JPMorgan Chase (JPMC), Wells Fargo and Citigroup reported earnings on Friday as the Q4 earnings season began last week. Below are highlights from their earnings:

JPMC reported an EPS of $3.79 with net income up 42% to $12.1bn as it released $2.9bn in credit loss reserves. While net interest income fell 7% to $13.4bn, overall trading revenues jumped 20% – a 15% rise in fixed income and a 32% rise in equity trading. They ended the year with a CET1 ratio of 13.1% vs 12.4% at year-beginning and capital above $200bn. They also noted they hold $1.4tn of cash and marketable securities, which is currently over $450bn in excess of what is required.

Wells Fargo reported an EPS of $0.64 with net income up 4% to $2.99bn. Net interest income fell 17% to $9.3bn, and trading revenues fell 13% due to lower credit adjustment revenue driven by wider credit spreads and lower equities revenue. Provision for credit losses increased $109mn driven by higher losses in the commercial real estate portfolio. They ended the year with a CET1 ratio of 11.6% vs 11.1% at year-beginning and noted that the board approved an increase in the Company’s authority to repurchase stock by an additional 500mn shares.

Citi reported an EPS of $2.08 with net income down 7% to $4.6bn, reporting lower revenues, increase in expenses, and a higher effective tax rate. They released $1.5bn in reserves for credit losses, bigger than analysts had expected. Trading revenues rose 11% led by the equities business up 57% while fixed income revenues were up 7%. They ended the year with a CET1 ratio of 11.8% unchanged from year-beginning.

JPMC’s 4.6% Perps were down 0.25 to 103.5, Wells’ 5.9% Perps were down 0.3 to 107.04 and Citi’s 6.25% Perps were up 0.5 to 115

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