Plastic surgery

12 October 2018 By John Foley Follow @johnsfoley

JPMorgan and Citi beat earnings estimates, partly helped by consumers showing no strain from their record levels of personal debt. Tax cuts and rising wages mean this can continue for a while. Lumpy investment-banking revenue gives banks a reason to hope it does.

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JPMorgan on Oct. 12 reported third-quarter earnings applicable to shareholders of $7.9 billion. The U.S. lender’s earnings per share of $2.34 increased 33 percent year-on-year, and compared with the consensus estimate of sell-side analysts of $2.25, according to Refinitiv I/B/E/S. Revenue of $27.8 billion was 5 percent more than the same period a last year.

Annualized return on equity was 14 percent and 17 percent on tangible common equity, both the same as the second quarter. JPMorgan had $148 billion of credit-card loans on its books at the end of September, on which it registered $176 billion of sales.

Citigroup on Oct. 12 reported earnings applicable to common shareholders of $4.3 billion for the three months ending Sept. 30. Earnings per share of $1.73 were 22 percent higher than last year’s third quarter and compared with the consensus forecasts of $1.69 a share. Revenue of $18.4 billion of revenue was the same as both the previous quarter and the same period last year.

Citi’s annualized return on equity was 9.6 percent, up from 9.2 percent in the preceding three months, while annualized return on tangible equity jumped to 11.3 percent from 10.8 percent.

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