Big Brokers Beat Estimates in Strong Start to Earnings Season
JPMorgan Chase and Wells Fargo, among other banks and asset managers, beat analysts’ expectations in the third quarter.
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Earnings season for Wall Street’s biggest names kicked off in earnest last week and got off to a good start as JPMorgan Chase, Wells Fargo, BlackRock, and BNY all beat analysts’ expectations. The data also assuaged some of Wall Street’s concerns that the recent Fed rate cut would take a major chunk out of company profits.
Citigroup and Goldman Sachs have big shoes to fill when they report today.
On the Wire
While the news was good on Wall Street, some of the world’s largest brokerages didn’t exactly ace their earnings reports. JPMorgan reached overall profits of $12.9 billion, down 2% year-over-year and a nearly 30% drop from last quarter. While profit declines are never ideal, CFO Jeremy Barnum told reporters that results were in line with the company’s guidance.
“These earnings are consistent with the soft-landing narrative,” he said. The success JPMorgan did have was bolstered by higher fees in its investment banking business, which surged 31% year-over-year.
Rival Wells Fargo saw profits in its wealth and investment management arm rise more than 9% from last quarter to $529 million, but they were still flat year-over-year. An ongoing SEC investigation regarding underpayment of interest rates on cash-sweep deposits tied to advisory accounts forced the bank to raise interest rates last quarter, costing it $128 million.
Book of Records. Meanwhile, BlackRock achieved record inflows of $221 billion last quarter, with assets under management reaching approximately $11.5 trillion, marking a new high for the third consecutive year. Looking ahead, the asset manager has its eyes set on private markets, and recently acquired industry data provider Preqin for $3.2 billion.
“Our strategy is ambitious, and our strategy is working,” BlackRock CEO Larry Fink said in a release.
Higher investment services fees boosted BNY’s profits, and it became the first bank in history to have assets under its custody and administration exceed $50 trillion. For reference, that value is greater than the GDP of any country in the world.
