While JP Morgan recorded a strong US$50.2 billion in revenue over Q2 2024, up by 18% from Q1’s US$41.9 billion figure, Wells Fargo and Citi saw the greatest improvements in equities revenue over the quarter.
Despite seeing a minor drop in overall revenue, reporting US$20.6 billion in comparison to Q1’s US$20.8 billion, equities revenue rose by 21% over the quarter at Wells Fargo to reach a reported US$558 million.
Citi saw similar results, with overall revenue dropping from US$21 billion to US$20 billion, and equities revenue up 21% from US$1.2 billion to US$1.5 billion over the quarter. Year-on-year they were up 37%, which CEO Jane Fraser cited as a result of strong performance in derivatives.
She added: “Markets had a strong finish to the quarter leading, to better performance than we had anticipated. Our results show the progress we are making in executing our strategy and the benefit of our diversified business model.”
In contrast, although overall revenue increased significantly at JP Morgan, within equities only a 10% increase to US$2.9 billion was recorded.
Commenting on the results, Wells Fargo CEO Charlie Scharf said: “The investments we have been making allowed us to take advantage of the market activity in the quarter with strong performance in investment advisory, trading, and investment banking fees.”
In the cases of both Citi and Wells Fargo, the decrease in revenue and net income (down 6% from US$3.4 billion to US$3.2 billion at Citi, and from US$4.9 to US$4.6 billion at Wells Fargo) was seen more clearly in fixed income figures.
At Citi, fixed income revenue fell by 15% from US$4.1 billion to US$3.5 billion between Q1 and Q2 (-15%); at Wells Fargo, these figures were US$1.3 and US$1.2 billion (-10%).
Considering the macro landscape, JP Morgan CEO Jamie Dimon stated: “While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks. These tail risks are the same ones that we have mentioned before. The geopolitical situation remains complex and potentially the most dangerous since World War II — though its outcome and effect on the global economy remain unknown. Next, there has been some progress bringing inflation down, but there are still multiple inflationary forces in front of us: large fiscal deficits, infrastructure needs, restructuring of trade and remilitarisation of the world. Therefore, inflation and interest rates may stay higher than the market expects. And finally, we still do not know the full effects of quantitative tightening on this scale.”
On his firm’s outlook, he concluded: “Our priorities remain unchanged. We continue to invest heavily into our businesses for long-term growth and profitability.”
©Markets Media Europe 2024
