Major Banks Report Q4 2024 Earnings Before CPI

As the financial sector concludes the fourth quarter earnings season, JPMorgan Chase, Wells Fargo, Bank of New York Mellon, Goldman Sachs, and Citigroup have reported their results, offering crucial insights into the banking sector's performance amid the evolving economic landscape.

JPMorgan Chase & Co. (JPM.US)

JPMorgan Chase delivered a strong fourth quarter performance, exceeding analyst expectations across key metrics. The bank reported adjusted revenue of $43.74 billion, significantly beating the consensus estimate of $42.01 billion. Earnings per share reached $4.81, demonstrating robust profitability. JPM gains 2% in premarket trading.

Key Performance Metrics:

• Loans: $1.35 trillion, meeting expectations

• Provision for credit losses: $2.63 billion, lower than estimated $3.04 billion

• Return on equity: 17% (vs. estimated 14.1%)

• Return on tangible common equity: 21% (vs. estimated 17.2%)

• Book value per share: $116.07

CEO Jamie Dimon highlighted the firm's strong performance across all business lines, noting particular strength in:

• Investment banking fees (up 49%)

• Markets revenue (up 21%)

• Payments revenue (reaching record $18.1 billion for the year)

• Consumer banking growth (2 million net new checking accounts in 2024)

• Asset & Wealth Management (record revenue of $5.8 billion)

Wells Fargo & Co. (WFC.US)

Wells Fargo reported mixed results for Q4 2024, with strong net interest income but some pressure on overall revenue and expenses. WFC gains 2.5% in premarket trading.

Key Metrics:

• Net interest income: $11.84 billion (beat estimate of $11.7 billion)

• Revenue: $20.38 billion (slightly below estimate of $20.59 billion)

• EPS: $1.43

• Average loans: $906.4 billion

• Efficiency ratio: 68% (higher than estimated 64.9%)

Business Segment Performance:

• Commercial banking revenue: $3.17 billion

• Corporate and investment banking revenue: $4.61 billion

• Wealth & investment management revenue: $3.96 billion

• Consumer banking and lending revenue: $8.98 billion

Bank of New York Mellon Corp. (BK.US)

BNY Mellon reported strong Q4 results, with significant beats on both earnings and revenue, driven by better-than-expected interest income and fee revenue. BK gains 1.75% in premarket trading.

Key Highlights:

• Adjusted EPS: $1.72 (vs. estimate $1.58)

• Total revenue: $4.85 billion (up 11% YoY)

• Net interest revenue: $1.19 billion (beat estimate of $1.06 billion)

• Net interest margin: 1.32% (beat estimate of 1.17%)

• Total fee and other revenue: $3.65 billion (beat estimate of $3.61 billion)

Asset Management and Services:

• Assets under management: $2.03 trillion

• Assets under administration: $52.1 trillion

• Net outflows: $15 billion

• Total deposits: $289.52 billion

Operational Efficiency:

• Non-interest expenses: $3.36 billion

• Return on equity: 12.2%

• Common equity Tier 1 ratio: 11.2%

• Liquidity coverage ratio: 115%

CEO Robin Vince noted the bank's successful transformation efforts in 2024, highlighting technological improvements that reduced custody trade unit costs by 5% and traditional fund services costs by 15%. The bank's AI platform, Eliza, now supports 35% of the workforce.

Goldman Sachs Group Inc. (GS.US)

Goldman Sachs delivered exceptional Q4 results, with significant beats across major business lines and record performance in equity trading. The bank's shares, which led major U.S. banks with a 48% advance in 2024, continued to show strength.

Key Financial Metrics:

• Net revenue: $13.87 billion (beat estimate of $12.37 billion)

• EPS: $11.95 (up from $5.48 year-over-year)

• Return on equity: 14.6% (beat estimate of 9.98%)

• Return on tangible equity: 15.5%

• Book value per share: $336.77 (up from $313.56 year-over-year)

• Efficiency ratio: 59.6%

Trading and Investment Banking Performance:

• FICC sales & trading revenue: $2.74 billion (beat estimate of $2.44 billion)

• Equities sales & trading revenue: $3.45 billion (up 32% year-over-year)

• Global Banking & Markets net revenues: $8.48 billion (up 33% year-over-year)

• Investment banking revenue: $2.06 billion (up 24% year-over-year)

• Advisory revenue: $960 million

• Equity underwriting revenue: $499 million (up 98% year-over-year)

• Debt underwriting revenue: $595 million (up 51% year-over-year)

Asset Management and Other Metrics:

• Assets under management: $3.14 trillion (up 12% year-over-year)

• Total AUS net inflows: $92 billion

• Loans: $196 billion (up 7.1% year-over-year)

• Total deposits: $433 billion

• Net interest income: $2.35 billion (up 75% year-over-year)

CEO David Solomon highlighted the firm's success in meeting or exceeding their five-year strategic targets, growing revenues by nearly 50% and enhancing the franchise's durability. The bank's positioning for an expected resurgence in deals, combined with its strong market performance, suggests continued momentum into 2025.

Citigroup Inc. (C.US)

Citigroup delivered strong Q4 results that exceeded analyst expectations, while announcing revised profitability targets and a significant share buyback program. However, the bank faces ongoing challenges in its transformation efforts. Citi gains 3.5% in premarket trading.

Key Financial Metrics:

• Revenue: $19.58 billion

• EPS: $1.34 (beat estimate of $1.24)

• Return on average equity: 5.4%

• Return on average tangible common equity: 6.1%

• Efficiency ratio: 67.3%

• Common equity Tier 1 ratio: 13.6%

Trading and Banking Performance:

• Markets revenue: $4.58 billion (beat estimate of $4 billion)

• FICC sales & trading revenue: $3.48 billion (up 37% year-over-year)

• Equities sales & trading revenue: $1.10 billion (up 34% year-over-year)

• Banking revenue: $1.24 billion

• Investment banking revenue: $925 million

Business Segment Performance:

• Services revenue: $5.18 billion

• Wealth revenue: $2.00 billion

• US Personal Banking revenue: $5.23 billion

• Net interest income: $13.73 billion

Strategic Updates:

• Revised ROTCE target to 10-11% by end of 2025 (down from previous 11-12%)

• Board authorized $20 billion stock repurchase program

• Full year 2024 net income up nearly 40% to $12.7 billion

• Returned approximately $7 billion of capital to shareholders

CEO Jane Fraser emphasized that 2024 was a critical year with the strategy delivering as intended, highlighting record performance in Services, Wealth, and U.S. Personal Banking. However, the lowered profitability target reflects ongoing challenges in expense management during the bank's global operational overhaul.

Market Outlook and Economic Commentary

JPMorgan CEO Jamie Dimon provided insights on the economic landscape, noting:

• Continued resilience in the U.S. economy

• Healthy consumer spending, including during the holiday season

• Improved business optimism

• Ongoing inflationary concerns

• Heightened geopolitical risks

Looking ahead to 2025, BNY Mellon expects:

• Mid-single digit percentage increase in net interest income

• Continued growth in fee income

• Ongoing benefits from technological transformation initiatives