Main developments
Volatile markets helped drive a rise in first-quarter profits at three of Wall Street’s biggest banks, as their trading businesses benefited from the geopolitical upheaval.
JPMorgan reported net income of $16.5bn, up from $14.6bn a year ago and the bank’s second-best quarter ever.
Chief executive Jamie Dimon said the US economy “remained resilient” even as concerns mount about the effect of higher oil prices.
At Citigroup, profits rose 42 per cent year on year to $5.8bn, also beating expectations.
Citi’s shares rose to their highest level since the financial crisis after its results.
Wells Fargo’s profits rose 7 per cent as the bank was boosted by higher revenue in its markets business.
BlackRock said its assets under management fell at the start of the year as a market downturn and currency swings offset almost $130bn of new client inflows in the quarter.
Better than expected profits, driven by its ETF franchise, helped lift BlackRock’s shares in pre-market trading.
Citigroup CEO dismisses speculation it is eyeing small lender acquisition
Citigroup chief executive Jane Fraser has dismissed speculation that the bank is eyeing an acquisition of a small lender in order to grow its deposit base.
“I want to be crystal clear, we are only interested in and focused on organic growth, period,” Fraser told analysts on Tuesday. “We are not interested in anything other than organic growth.”
Citi’s share price has rallied in the past year as it nears the end of an ambitious restructuring. The stock hit its highest level since the financial crisis earlier today.
Wells Fargo seeks to calm investors about growing private credit exposure
Wells Fargo has sought to reassure investors about its growing exposure to private credit alongside its quarterly earnings.
The bank is a dominant lender to NDFIs — non-deposit financial institutions — which include private credit funds. But this type of lending has attracted scrutiny in recent months because of concerns about credit quality.
Wells said it had concentration of less than 2 per cent in individual private credit loan facilities and that nearly all of these structures included the ability to approve assets and revalue assets included in the facilities.
On average, the portfolios would need to absorb a loss of about 40 per cent before the bank would recognise a loss, it added.
“Really, really bad things need to happen for us to lose money in most of these portfolios,” chief executive Charlie Scharf told analysts. “We feel really, really good about the way these things are structured, the client selection we have.”