Tag: JPMorgan Chase &amp; Co

January 26, 2023

Bank of America, JPMorgan and other banks reportedly team up on digital wallet to rival Apple Pay

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Brendan McDermid | Reuters

Several banks are reportedly working on a digital wallet that links with debit and credit cards to compete with Apple Pay and PayPal.

According to the Wall Street Journal, the digital wallet would be operated by Early Warning Services, a joint venture from several banks that also runs Zelle. The major banks involved include Wells Fargo, JPMorgan Chase and Bank of America, according to the report.

The new wallet would initially be launched with Visa and Mastercard already on board, according to the report.

The move could be seen as an effort to slow Apple‘s push into consumer banking, as the tech giant already offers a branded credit card and is exploring other products for their famously loyal customer base.

Shares of PayPal, which has digital payments as its core business, slipped about 1.5% in premarket trading.

The report follows a mixed earnings season for big banks, with several CEOs including Bank of America’s Brian Moynihan warning that the U.S. was likely to see a mild recession. Bank stocks have struggled over the past year even as interest rates have risen, as fears of a recession and a slower investment banking environment have offset gains in net interest income.

Read the full WSJ story here.

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January 23, 2023

Morgan Stanley CEO says the bank’s push for more stable revenue streams has worked. It’s a key reason we own the stock

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Morgan Stanley ‘s (MS) multiyear transformation plan has been a success, CEO James Gorman said with pride Thursday — and, as shareholders, we see no reason to disagree. “We’ve steadily de-risked parts of the business that got us in trouble during the [Great Financial Crisis], and we obviously made a major push in building up wealth and asset management, and it worked,” Gorman said in a CNBC interview from the World Economic Forum in Davos, Switzerland. “We’re delighted with where we got to.” The Club is delighted, too, even if the market hasn’t always shared our conviction in the shift Gorman has engineered since taking over the Wall Street bank in 2010. Under Gorman’s leadership, Morgan Stanley has pivoted toward the more stable revenues associated with wealth and asset management, which decreases its reliance on the often volatile investment banking and trading businesses. This strategy attracted us to the stock nearly two years ago, believing that it would boost Morgan Stanley’s valuation over time — because, in general, investors put a premium on steady sales streams. MS 6M mountain Morgan Stanley’s stock performance over the past six months. Morgan Stanley’s strong quarterly results earlier this week validated our ownership yet again. Those fourth-quarter numbers also came on the same morning its longtime Wall Street rival, Goldman Sachs (GS), reported a sizable earnings miss due, in part, to its expansion into consumer banking . While declining to comment Thursday on his competitor, Gorman happily outlined what he views as the benefits of Morgan Stanley’s transformation. “We needed to build a business where, if the world got tough again — which we just saw last year an example of it — we would be just fine. And the way to do that is to build businesses that are stable; it doesn’t matter what the market conditions are,” Gorman said. “Listen, every person who is buying a stock, there’s somebody else selling it. Everybody who is buying a bond is taking money out of cash. … There’s constant movement of money. Our job is to be in the middle.” Acquisitions were a big part of how Morgan Stanley maneuvered its way into the middle of that money flow. The bank took full control of wealth manager Smith Barney a decade ago. More recently, it purchased brokerage E-Trade and investment management firm Eaton Vance . Valued at roughly $20 billion in total, those acquisitions closed in October 2020 and March 2021, respectively. The deals were “aggressive,” Gorman acknowledged. “We were told consistently when we bought Smith Barney then E-Trade, then Eaton Vance, we overpaid on all of them. My response was, ‘You’re right.’ But it doesn’t matter,” Gorman told CNBC. “We now own the business. It doesn’t matter plus or minus a billion dollars. What matters is over a 10-year period what you can do with that business.” We now own the business. It doesn’t matter plus or minus a billion dollars. What matters is over a 10-year period what you can do with that business. Morgan Stanley CEO James Gorman Economic outlook Gorman was also asked about his thoughts on the global economy, inflation and the Federal Reserve. His outlook was relatively optimistic at a time when consensus expectations are for a U.S. recession, albeit a mild one. Gorman said he thinks 2023 will be an improvement compared with 2022, which was filled with slumping stock markets and elevated price pressures that prompted a very aggressive interest rate-hiking campaign from the Federal Reserve. “I think it’ll be better. I really do,” Gorman said. While it’s unclear what the Fed will do with rates in the coming months, Gorman said that one favorable development, at least, is that U.S. inflation has already peaked. Recent government data has supported Gorman’s contention, with price pressures cooling for both consumers and wholesale producers . Another positive is what’s happening economically in China, Gorman said. While the CEO said Beijing’s decision to relax strict Covid controls is important, he put more emphasis on an adoption of growth-oriented economic policies and a thawing of U.S.-China tensions. He pointed to the meeting this week between U.S. Treasury Secretary Janet Yellen and Chinese Vice Premier Liu He as evidence. Elsewhere across banking, JPMorgan (JPM) CEO Jamie Dimon told CNBC earlier Thursday he believes the Fed may need to rise interest rates above its current projections because, he thinks, “there’s a lot of underlying inflation, which won’t go away so quick.” The Club’s take Despite widespread recession fears since last year, the Club has maintained its belief in Morgan Stanley. The transformation plan that Gorman touted throughout Thursday’s interview showed why we not only stayed invested but bulked up our position at lower levels as the stock sold off early last year. As of right now, we’ve got a 2 rating on Morgan Stanley, meaning we’d wait for a pullback before buying more shares. The stock has gained more than 10% already in 2023 — helped in large part by a nearly 6% advance Tuesday as investors cheered the bank’s earnings report. We can certainly afford to be patient while we wait for investment banking revenues to bounce back from a multi-quarter slump. Morgan Stanley shares carry a roughly 3.3% dividend yield, and it bought back $1.7 billion worth of stock in the fourth quarter. The firm appears to be positioned to continue repurchasing stock because in June its board authorized a multiyear, $20 billion buyback program . (Jim Cramer’s Charitable Trust is long MS . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

James Gorman, Chairman & CEO of Morgan Stanley, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 19th, 2023..

Adam Galica | CNBC

Morgan Stanley‘s (MS) multiyear transformation plan has been a success, CEO James Gorman said with pride Thursday — and, as shareholders, we see no reason to disagree.

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Jamie Dimon says rates will rise above 5% because there is still ‘a lot of underlying inflation’

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JPMorgan Chase CEO Jamie Dimon believes interest rates could go higher than what the Federal Reserve currently projects as inflation remains stubbornly elevated.

“I actually think rates are probably going to go higher than 5% … because I think there’s a lot of underlying inflation, which won’t go away so quick,” Dimon said Thursday on CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland.

To battle soaring prices, the Fed has raised its benchmark interest rate to a targeted range between 4.25% and 4.5%, the highest level in 15 years. The anticipated “terminal rate,” or point where officials expect to end the rate hikes, was set at 5.1% at its December meeting.

The consumer price index, which measures the cost of a broad basket of goods and services, rose 6.5% in December from a year ago, marking the smallest annual increase since October 2021.

Dimon said the recent easing of inflation comes from temporary factors such as a pullback in oil prices and a slowdown in China due to the Covid pandemic.

Jamie Dimon, President, CEO & Chairman of JP Morgan Chase, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 19th, 2023.

Adam Galica | CNBC

“We’ve had the benefit of China’s slowing down, the benefit of oil prices dropping a little bit,” Dimon said. “I think oil gas prices probably go up the next 10 years … China isn’t going to be deflationary anymore.”

The series of aggressive rate hikes have fueled worries of a recession in the U.S. Central bankers still feel they have leeway to raise rates as the labor market and the consumer remain strong.

The JPMorgan chief said if the U.S. suffers a mild recession, interest rates will rise to 6%. He added that it’s hard for anyone to predict economic downturns.

“I know there are going to be recessions, ups and downs. I really don’t spend that much time worrying about it. I do worry that poor public policy damages American growth,” Dimon said.

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JPMorgan’s Jamie Dimon: Bitcoin is a ‘hyped-up fraud’

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Jamie Dimon, JPMorgan Chase chairman and CEO, joins 'Squawk Box' to discuss Dimon's thoughts on cryptocurrencies and the blockchain technology behind it.

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JPMorgan’s Jamie Dimon lays out economic forecast for 2023 and worries over geopolitical conflict

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Jamie Dimon, JPMorgan Chase chairman and CEO, joins ‘Squawk Box’ to discuss Dimon’s thoughts on the economy, what Dimon is advising clients at this time and the United States’ relationship with China.

04:08

Thu, Jan 19 20236:56 AM EST

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Goldman Sachs is set to report fourth-quarter earnings — here’s what the Street expects

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David Solomon, chief executive officer of Goldman Sachs Group Inc., during a Bloomberg Television at the Goldman Sachs Financial Services Conference in New York, US, on Tuesday, Dec. 6, 2022.

Michael Nagle | Bloomberg | Getty Images

Goldman Sachs is scheduled to report fourth-quarter earnings before the opening bell Tuesday.

Here’s what Wall Street expects:

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Earnings: $5.48 per share, 49% lower than a year earlier, according to Refinitiv
Revenue: $10.83 billion, 14% lower than a year earlier.
Trading Revenue: Fixed Income $2.31 billion, Equities $2.14 billion
Investing Banking: $1.75 billion

How long will the investment banking drought last?

That’s one of the top questions analysts will have for Goldman CEO David Solomon.

While the fourth quarter was an ugly one for bankers — Wall Street rivals JPMorgan Chase and Citigroup each posted declines in investment banking revenue of nearly 60% last week — analysts question the odds of a rebound sometime later this year.

They’ll also want to hear Solomon’s views on headcount and expenses after the bank laid off up to 3,200 employees last week, as well as details about Goldman’s consumer operations as it scales back ambitions there.

Goldman shares have climbed 8.9% this year going into Tuesday’s trading, compared with a 6.7% advance for the KBW Bank Index.

Last week, JPMorgan Chase and Bank of America topped profit expectations on surging net interest income, while Wells Fargo and Citigroup posted mixed results. Morgan Stanley is also scheduled to release results Tuesday.

This story is developing. Please check back for updates.

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January 16, 2023

Brian Moynihan says Bank of America expects ‘mild recession’ and is preparing for worse

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Bank of America CEO Brian Moynihan said Friday that the bank is preparing for a potential recession in 2023, including a scenario where unemployment rises rapidly.

“Our baseline scenario contemplates a mild recession. … But we also add to that a downside scenario, and what this results in is 95% of our reserve methodology is weighted toward a recessionary environment in 2023,” Moynihan said on a call with investors.

That pessimistic case, which is more negative than it was last quarter, calls for unemployment to rise to 5.5% early this year and remain at 5% or above through the end of 2024, Moynihan said.

The CEO’s statement mirrors the earnings report for JPMorgan Chase, whose economic outlook calls for “a mild recession in the central case.“

Bank of America beat estimates on the top and bottom lines for its fourth quarter, but its $1.1 billion provision for credit losses was a sharp reversal from a negative number in that metric a year ago.

While the bank said net credit charge-offs are still below pre-Covid pandemic levels, outstanding balances on credit cards are up 14% year over year, and Moynihan said delinquencies are rising from their unusually low pandemic levels.

Shares of Bank of America were up 2.2% on Friday.

Watch CNBC's full interview with Bank of America's Brian Moynihan

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Pro Picks: Watch all of Friday’s big stock calls on CNBC

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Bank earnings fail to impress investors as recession worries rise | CNN Business

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New York
CNN
—

JPMorgan Chase, Bank of America, Citigroup and asset management giant BlackRock posted results that topped Wall Street’s forecasts Friday, but investors were nonetheless a little disappointed at first.

Trading was choppy, with most bank stocks falling at the open before rebounding. Shares of JPMorgan Chase

(JPM) were up about 2.5% in late afternoon trading while BofA

(BAC) was up 2%. Wells Fargo

(WFC), which reported earnings that missed Wall Street’s targets, reversed earlier losses and was up 3%. Citi

(C) was up 2% while BlackRock

(BLK) was flat.

“The earnings were solid, but the market is concerned with recession fears,” said John Curran, managing director and head of North American bank coverage at MUFG.

Investors might have been concerned by the downbeat tone of the big banks. Executives are clearly still worried about inflation and the threat of a recession this year following several big interest rate hikes by the Federal Reserve.

JPMorgan Chase CEO Jamie Dimon said in the bank’s earnings statement that although the economy is still strong and that consumers and businesses are spending and healthy, “we still do not know the ultimate effect of the headwinds coming from geopolitical tensions including the war in Ukraine, the vulnerable state of energy and food supplies, persistent inflation that is eroding purchasing power and has pushed interest rates higher.”

The bank added in the earnings release that it now expects a “mild recession” as a base economic case. CFO Jeremy Barnum added during a conference call with reporters that in addition to the slowdown that has already started in its home lending unit, it is starting to see “headwinds” in auto lending.

Meanwhile, BofA CEO Brian Moynihan noted that this is “an increasingly slowing economic environment” and Wells Fargo CEO Charlie Scharf said “we are carefully watching the impact of higher rates on our customers.” Wells Fargo recently announced plans to pull back on its massive mortgage business.

Banks are clearly worried about a looming recession, and Wall Street has taken notice.

Moody’s Investors Service analyst Peter Nerby noted in a report that “credit provisions are rising” at JPMorgan Chase and that Citi “built capital and reserves in anticipation of a slowdown in core markets.”

The Fed’s rate hikes aren’t helping either.

“Higher than expected interest rates pose a significant risk to the outlook for credit quality, loan growth and net interest margins,” said David Wagner, a portfolio manager at Aptus Capital Advisors, in an email.

Concerns about the economy were one reason why stocks plunged in 2022, suffering their worst year since 2008. As a result of the Wall Street slump, there was a major slowdown in merger activity and initial public offerings.

That hurt the investment banking businesses for the top banks. JPMorgan Chase and Citi each said that advisory fees plummeted nearly 60% in the quarter.

Goldman Sachs

(GS) and Morgan Stanley

(MS) will give more color about the health of Wall Street next Tuesday when they both report their fourth quarter results.

Goldman Sachs, which has aggressively built up a consumer banking unit over the past few years, has struggled to make money in that division. Goldman Sachs disclosed in a regulatory filing Friday that it has lost more than $3 billion in its consumer business since 2020.

There were some signs of optimism though. BlackRock, which owns the massive iShares family of exchange-traded funds, reported a rebound in assets under management from the third quarter to the fourth quarter as stocks soared in October and November.

“The current environment offers incredible opportunities for long-term investors,” said BlackRock CEO Larry Fink in the earnings release.

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Four troubling global trade trends flashing consumer weakness for a market already fearing recession

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Wall Street’s biggest bank CEOs, from Jamie Dimon at JPMorgan to Brian Moynihan at Bank of America, were talking a recession as the “base case” as part of earnings reports on Friday morning.

It might be a “mild” one, as Moynihan predicts, but from the world of global trade, there are several indicators backing up the bank chiefs’ view of the macroeconomic landscape, flashing warning signals of continued consumer weakness for the first quarter.

The flow of trade is a real-time and forward-looking indicator of consumer spending and the economy because it shows supply, demand, and consumption. Here are four indicators to watch and what they are currently showing.

Indicator No. 1: Warehouse inventory and rates

Warehouse inventory is a good indicator of the health of the consumer because it gauges how much product is sitting in storage. The more product sitting in storage, the more it takes up valuable space and increases the price of storage. According to WarehouseQuote’s Warehouse Pricing Index report for Q1 2023, warehouse rates remain at high levels as a result of warehouse inventories not coming down significantly in November and December.

This is significant because holiday items were brought in early in 2022 to avoid any delays as shippers saw in 2021. Holiday products were shipped from China to the U.S. between March and May of 2022, leading to increased storage in a warehouse, and that resulted in some massive inventory pileups during the summer from the biggest retailers including Walmart and Target. During the holiday season, it took hefty markdowns from retailers to move products. Where products were being moved more successfully was through internet-based sales.

“Based on the inventory, we see more consumers purchased online rather than in-store,” said Jordan Brunk, chief marketing officer of WarehouseQuote.com. “We had more e-commerce inventory from the warehouse than inventory heading to the brick-and-mortar stores.”

Overall, it expects the lack of warehouse capacity, combined with the lack of new square footage coming online due to the rising cost of capital and slower economy, to keep prices elevated even in a weaker consumer environment.

In Maersk‘s TransPacific Report at the end of December, it said weak demand was “expected to continue into 2023 due to a combination of high inventory levels and the likelihood of a global recession that could already be underway.”

Indicator No. 2: Manufacturing orders

The first indicator is manufacturing orders. Orders continue to be down, based on CNBC reporting, with the high inventories and a lack of consumer demand.

“We are still seeing a 40% drop in current manufacturing orders,” said Alan Baer, CEO of OL USA. “The first quarter is going to be challenging.”

The decrease in orders is based on what the factories normally receive from companies.

Indicator No. 3: Ocean freight bookings

As a result of the decrease in factory orders, there is less demand to book freight on a vessel. The SONAR Freightwaves chart below shows the steady decrease in global ocean orders.

The health of the U.S. consumer and the state of inventories for U.S. companies can be tracked by the amount of global product being brought in by ocean carriers. Ninety percent of all U.S. trade is moved on the ocean. The following chart from SONAR FreightWaves shows the diminished volumes on a global basis.

Indicator No. 4: Blank (cancelled) sailings

Blank sailings are a tool used by ocean carriers as a way to artificially constrict available vessel capacity which influences ocean freight rates. As a result of the drop in manufacturing orders and ocean orders, there are too many ships. Because of the lack of demand for the movement of ocean freight, due to the reduced manufacturing orders, ocean rates have precipitously dropped in all trade routes.

According to Xeneta and Sea-Intelligence, ocean carriers canceled more than six times the number of sailings on Asia to the U.S. West Coast trade route ahead of the Chinese New Year than they did during the same time frame in 2019.

“In a normal year, we tend to see very few blanked sailings in the run-up to this major Chinese holiday as shippers stock up on their inventories,” said Peter Sand, chief analyst at Xeneta. “So, this is a worrying development for carriers and, no doubt, a bad omen of what’s to come for the year ahead.”

Canceled sailings on the other leading trade routes also are elevated. The Far East to the U.S. East Coast skyrocketed by 340% over the same time period. Asia to North Europe has had a 715% increase in blanked sailings.

“This really demonstrates the low level of demand gripping the industry,” Sand said.

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We need to take the bank numbers with a grain of salt, says Interactive Brokers’ Steve Sosnick

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Squawk on the Street

Steve Sosnick, Interactive Brokers chief strategist, joins ‘Squawk on the Street’ to discuss big bank results and what to expect moving forward.

00:58

10 minutes ago

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Breaking down JPMorgan Chase and Wells Fargo earnings

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Ken Leon of CFRA and David Long of Raymond James discuss their respective calls on banks, specifically JPMorgan and Wells Fargo.

03:27

Fri, Jan 13 202311:05 AM EST

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Citigroup’s fourth-quarter profit declines by 21% as bank sets aside more money for credit losses

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Citigroup said it had identified the cause of the flash crash and corrected the error “within minutes.”

Jim Dyson | Getty Images News | Getty Images

Citigroup said fourth-quarter net income decreased by more than 21% from a year ago as the bank set aside more money for potential credit losses.

Shares rose 1.7% as investors looked to some positives in the report including a record fourth quarter for fixed income trading.

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Here are the fourth-quarter numbers versus what Wall Street expected:

Net income: $2.5 billion versus $3.2 billion a year ago.
Earnings: $1.10 a share, excluding certain divestitures. (It was not clear if that was comparable to the $1.14 a share estimate from analysts.)
Revenue: $18.01 billion in revenues, above the $17.9 billion expected from analysts polled by Refinitiv.
Net Interest Income: $13.27 billion, above the 12.7 billion expected by analysts, according to StreetAccount
Trading Revenue: Fixed Income $3.16 billion, above expectations. Equities trading was $789 million, below expectations.
Provision for credit losses: $1.85 billion compared to $1.79 billion expected by analysts polled by StreetAccount.

CEO Jane Fraser’s turnaround efforts at Citigroup have hit a snag amid concerns over a global economic slowdown and as central banks around the world battle inflation. Like the rest of the industry, Citigroup is also contending with a sharp decline in investment banking revenue, partly offset by an expected boost to trading results in the quarter.

Citigroup’s net income slumped 21% to $2.5 billion from $3.2 billion in the previous year, largely due to slowing loan growth in its private bank alongside expectations for a weaker macroeconomic environment going forward. The weakness was partially offset by higher revenues and lower expenses.

The bank said it set aside more money for credit losses going forward, increasing provisions 35% from the previous quarter to $1.85 billion. This build included $640 million for unfunded commitments due to loan growth in the private bank.

Revenues in services and markets divisions increased 32% and 18% respectively, driven by growth in interest income and in fixed income markets. The fixed income markets division saw revenues jump 31% to $3.2 billion, the highest fourth-quarter results ever, due to strength in rates and currencies.

“With their revenues up 32%, Services delivered another excellent quarter, and we have gained significant share in both Treasury and Trade Solutions and Securities Services,” Fraser said in a press release. “Markets had the best fourth quarter in recent memory, driven by a 31% increase in Fixed Income, while Banking and Wealth Management were impacted by the same market conditions they faced throughout the year.”

There was also strength in banking, with private bank revenues gaining 5% and U.S. personal bank revenues up 10%. Retail banking revenues, however, fell 3% due to lower mortgage volumes.

JPMorgan, Bank of America and Wells Fargo also reported earnings on Friday. JPMorgan topped analyst estimates for the quarter and said that it now sees a mild recession as the base case for 2023. Bank of America also beat Wall Street’s expectations as higher interest rates offset losses in investment banking.

Wells Fargo shares rose despite the bank reporting that profits fell in the latest quarter due to a recent settlement and the bank’s boosted reserves amid economic weakness.

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Bank of America tops expectations as higher rates help offset declines in investment banking

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Brian Moynihan, CEO, Bank of America

Scott Mlyn | CNBC

Bank of America reported fourth-quarter results on Friday that showed higher interest rates helped the Wall Street giant make up for a sharp slowdown in investment banking.

Here are the key metrics compared with what Wall Street expected:

Earnings: 85 cents per share versus 77 cents a share, according to Refinitiv
Revenue: $24.66 billion versus $24.33 billion, according to Refinitiv

The results were boosted by sizeable gains in interest income thanks to higher rates and loan growth in the fourth quarter. The bank reported $14.7 billion of net interest income, up 29% year over year but slightly below Wall Street expectations of $14.8 billion, according to StreetAccount.

That gain helped offset a decline in investment banking fees, which fell more than 50% to $1.1 billion. That result was largely in line with expectations, according to StreetAccount.

However, the bank did guide for net interest income to decline sequentially in the first quarter of 2023.

Shares of Bank of America rose 2.2% on Friday.

“The themes in the quarter have been consistent all year as organic growth and rates helped deliver the value of our deposit franchise. That coupled with expense management helped drive operating leverage for the sixth consecutive quarter,” CEO Brian Moynihan said in a statement.

Bank of America was supposed to be one of the main beneficiaries of the Federal Reserve’s rate-boosting campaign. But bank stocks got hammered last year amid concerns a recession was on the way.

The bank implemented a $1.1 billion provision for credit losses, up $1.6 billion compared with the same quarter in 2021, but said net charge-offs remain below pre-pandemic levels.

Notably, that was below the $2.3 billion provision for credit losses from rival JPMorgan Chase, but Moynihan said Bank of America is similarly expecting a mild recession.

“Our baseline scenario contemplates a mild recession. … But we also add to that a downside scenario, and what this results in is 95% of our reserve methodology is weighted toward a recessionary environment in 2023,” Moynihan said on a call with investors.

On the consumer banking front, Bank of America reported that balances were roughly flat, while credit card and debit spending rose 5% year over year. Average outstanding balance on credit cards climbed by 14%.

Average loans and leases for the whole bank rose 10% year over year, while the same metric for consumer banking rose 6%.

The global wealth and investment management business saw total revenue increase marginally even as average deposits declined. Net income for the segment was down 2% year over year.

Revenue from fixed income, currency and commodity trading was another bright spot, rising 37% year over year.

Prior to the report, Bank of America’s stock was up 4% in the first few days of 2023.

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JPMorgan Chase is set to report fourth-quarter earnings — here’s what the Street expects

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Jamie Dimon, CEO of JPMorgan Chase, testifies during the Senate Banking, Housing, and Urban Affairs Committee hearing titled Annual Oversight of the Nations Largest Banks, in Hart Building on Thursday, September 22, 2022.

Tom Williams | CQ-Roll Call, Inc. | Getty Images

JPMorgan Chase is scheduled to report fourth-quarter earnings before the opening bell Friday.

Here’s what Wall Street expects:

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Earnings: $3.07 per share, 7.9% lower than a year earlier, according to Refinitiv.
Revenue: $34.3 billion, 13% higher than a year earlier.
Provision for credit losses $1.96 billion, according to StreetAccount
Trading revenue: fixed income $3.76 billion, equities $1.92 billion
Investment banking revenue: $1.57 billion

JPMorgan, the biggest U.S. bank by assets, will be closely watched for clues on how the industry is navigating an economy at a crossroads.

Analysts are expecting a mixed bag of conflicting trends from banks. Higher rates will help lenders earn more interest income, but some of that boost will be offset by larger provisions for expected loan losses as the economy slows.

Wall Street won’t likely come to the rescue. Investment banking revenue is expected to plunge 50% in the wake of frozen IPO markets and subdued deals, Barclays analyst Jason Goldberg said in a Jan. 11 note.

That will be partly offset by a 10% rise in trading revenue, thanks to a boost from fixed income operations, he wrote.

Of greater interest, perhaps, is what JPMorgan CEO Jamie Dimon says about the economy. The veteran CEO rattled markets last year when he said an economic “hurricane” caused by the Federal Reserve was headed for the U.S.

Shares of JPMorgan have climbed 4% this year, compared with the 6% rise of the KBW Bank Index.

The other large retail banks, including Bank of America, Wells Fargo and Citigroup, are also scheduled to release results Friday, while Goldman Sachs and Morgan Stanley report Tuesday.

This story is developing. Please check back for updates.

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Watch CNBC’s full discussion on bank earnings with Wells Fargo’s Mike Mayo

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Wells Fargo’s Mike Mayo joins ‘Closing Bell: Overtime’ to discuss upcoming bank earnings, which kick off tomorrow with Citi, Bank of America, JPMorgan and Wells Fargo, all reporting before the opening bell.

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We’re excited about big banks with strong consumer deposits, says RBC’s Gerard Cassidy

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CNBC’s Hugh Son and Gerard Cassidy of RBC join ‘The Exchange’ to discuss upcoming bank earnings, Cassidy’s picks and projected declines in earnings.

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JPMorgan shutters website it paid $175 million for, accuses founder of inventing millions of accounts

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Dimon said in June that he was preparing the bank for an economic “hurricane” caused by the Federal Reserve and Russia’s war in Ukraine.

Al Drago | Bloomberg | Getty Images

JPMorgan Chase on Thursday shut down the website for a college financial aid platform it bought for $175 million after alleging that the company’s founder created nearly 4 million fake customer accounts.

The country’s biggest bank acquired Frank in Sept. 2021 to help it deepen relationships with college students, a key demographic, a Chase executive told CNBC at the time.

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JPMorgan touted the deal as giving it the “fastest-growing college financial planning platform” used by more than five million students at 6,000 institutions. It also provided access to the startup’s founder Charlie Javice, who joined the New York-based bank as part of the acquisition.

Months after the transaction closed, JPMorgan said it learned the truth after sending out marketing emails to a batch of 400,000 Frank customers. About 70% of the emails bounced back, the bank said in a lawsuit filed last month in federal court.

Javice, who had approached JPMorgan in mid-2021 about a potential sale, lied to the bank about her startup’s scale, the bank alleged. Specifically, after being pressed for confirmation of Frank’s customer base during the due diligence process, Javice used a data scientist to invent millions of fake accounts, according to JPMorgan.

“To cash in, Javice decided to lie, including lying about Frank’s success, Frank’s size, and the depth of Frank’s market penetration in order to induce JPMC to purchase Frank for $175 million,” the bank said. “Javice represented in documents placed in the acquisition data room, in pitch materials, and through verbal presentations [that] more than 4.25 million students had created Frank accounts to begin applying for federal student aid using Frank’s application tool.”

Instead of gaining a business with 4.25 million students, JPMorgan had one with “fewer than 300,000 customers,” JPMorgan said in the suit.

Javice’s defense

A lawyer for Javice told the Wall Street Journal that JPMorgan had “manufactured” reasons to fire her late last year to avoid paying millions of dollars owed to her. Javice has sued JPMorgan, saying that the bank should front legal bills she incurred during its internal investigations.

“After JPM rushed to acquire Charlie’s rocketship business, JPM realized they couldn’t work around existing student privacy laws, committed misconduct and then tried to retrade the deal,” attorney Alex Spiro told the Journal. “Charlie blew the whistle and then sued.”

Spiro, a partner with Quinn Emanuel, didn’t immediately return a call from CNBC.

JPMorgan spokesman Pablo Rodriguez had this response:

“Our legal claims against Ms. Javice and Mr. Amar are set out in our complaint, along with the key facts,” he said. “Ms. Javice was not and is not a whistleblower. Any dispute will be resolved through the legal process.”

‘Pinch me’

The alleged fraud perpetrated by Javice and one of her executives “materially damaged JPMC in an amount to be proven at trial, but not less than $175 million,” JPMorgan said in its suit.

Regardless of the outcome of this legal scuffle, this is an embarrassing episode for JPMorgan and its CEO Jamie Dimon. In a bid to fend off encroaching competitors, JPMorgan has gone on a buying spree of fintech companies in recent years, and Dimon has repeatedly defended his technology investments as necessary ones that will yield good returns.

The fact that a young founder in an industry known for shaky metrics and a “fake it ’til you make it” ethos managed to dupe JPMorgan calls into question how stringent the bank’s due diligence process is.

In an interview at the time of the deal, Javice marveled at how far she had come in just a few years leading her startup.

“Today is my first day employed by someone else, ever,” Javice told CNBC. “I mean it still feels very much like, pinch me, did this really happen?”

As a result of the legal scuffle, JPMorgan shut down Frank early Thursday morning.

“Frank is no longer available” the website now reads. “To file your Free Application for Federal Student Aid (FAFSA), visit StudentAid.gov.”

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