The largest U.S. banks will announce their second-quarter results this week. Investors should expect another big hit to earnings as banks set aside more money to cover expected loan losses. On the other hand, the big banks are also continuing to see a boost to fee income from elevated investment-banking and trading activity, even as the coronavirus crisis continues.
JPMorgan Chase & Co.
and Wells Fargo & Co.
are all scheduled to report their second-quarter results on Tuesday. Goldman Sachs Group Inc.
is expected to report on July 15, followed by Bank of America Corp.
and Morgan Stanley
on July 16, to round out the “big six” U.S. banks. All earnings announcement will be made before the market open.
Opinions about the group vary greatly. Investors naturally shy away from bank stocks during a recession. Memories of the 2008 financial crisis, caused in great part by the banks and resulting in a government bailout and dilutive capital raises, are fresh enough. But this time around, “capital levels are good and sturdy for the large U.S. banks,” according to Jon Curran, a senior bank analyst and portfolio manager at Aberdeen Standard Investments.
During an interview, Curran pointed to “a surge in investment-grade bond offerings” as well as fees from increased mortgage lending as two factors that are helping to offset the big banks’ rising credit costs.
Below are consensus second-quarter earnings-per-share estimates among analysts polled by FactSet, along with actual numbers from the previous quarter and the year-earlier quarter:
|Bank holding company||Ticker||Total assets – March 31, 2020 ($bil)||Estimated EPS – Q2, 2020||EPS – Q1, 2020||EPS – Q2, 2019|
|JPMorgan Chase & Co.||
|Bank of America Corp.||
|Wells Fargo & Co.||
|Goldman Sachs Group Inc.||
You may have to scroll the tables to see all of the data. You can click on the tickers for more about each company, including news coverage and price charts.
Three of the six are expected to show sequential improvements in earnings. Profits will be down significantly from a year earlier, because of the higher provisions for loan losses.
|Bank holding company||Ticker|