Some of the largest financial institutions posted positive earnings despite bank turmoil during the first quarter of 2023, according to their earning reports published on Friday.
JPMorgan Chase, Citigroup, Wells Fargo, and PNC all released earnings reports on Friday, showing they have done well so far this year despite the failures of Silicon Valley Bank (SVB) and Signature Bank in March, with each bank beating estimates by between about 9% and almost 21% in the case of JPMorgan. The earnings reports showed revenue growth for big banks, partly fueled by high interest rates which allowed them to collect more interest on their loans, according to Reuters.
However, America’s 25 biggest banks gained $120 billion in deposits after the collapses and bailouts of SVB and Signature, while deposits at smaller banks dropped by $108 billion, according to The Wall Street Journal. (RELATED: Janet Yellen’s Policy Would Destroy Small US Banks While Bailing Out Chinese Depositors, Experts Say)
Despite the massive money movement to banks like his, JPMorgan CEO Jamie Dimon said the notion that sector turmoil was positive for big banks was “absurd.”
“Any crisis that damages Americans’ trust in their banks damages all banks – a fact that was known even before this crisis,” Dimon wrote in his annual shareholder letter.
WASHINGTON, DC – SEPTEMBER 22: JPMorgan Chase & Co CEO Jamie Dimon raises his hand while responding to a question during a Senate Banking, Housing, and Urban Affairs Committee hearing on Capitol Hill September 22, 2022 in Washington, DC. The committee held the hearing for annual oversight of the nation’s largest banks. (Photo by Drew Angerer/Getty Images)
While many major banks published earnings on Friday, others such as Goldman Sachs, Bank of America and Morgan Stanley are scheduled to report through the week, according to Reuters.
“Regional bank earnings will come in very slightly positive, while bigger banks will probably post surprisingly positive results,” Sam Stovall, chief investment strategist at CFRA Research, told Reuters.
The FDIC may only protect deposits at banks whose failures are designated as systemic risks in order to prevent bank runs from spreading to other financial institutions, Treasury Secretary Janet Yellen told lawmakers during a Senate Appropriations Committee hearing in March.
Over 70% of 1,000 likely voters surveyed stated the FDIC should not bail out big depositors, according to a poll by Convention of States Action in collaboration with The Trafalgar Group.
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