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Investment Banks Kick off Earnings Season with Strong Profits

January 20, 2025

The U.S. banking sector closed 2024 with strong results, as JPMorgan Chase, Wells Fargo, Citigroup, and Goldman Sachs reported quarterly earnings that exceeded Wall Street expectations. These results reflect last year's market recovery after previous declines. Future prospects are surrounded by optimism, although some risks remain.

 Investment Banks Kick off Earnings Season with Strong Profits

JPMorgan Chase Still at the Forefront

In investment banking, JPMorgan continues to be a global leader, maintaining its position in its 2024 results. Net income reached $58.5 billion, an 18% year-over-year increase. In Q4, the bank reported total revenue of $43.7 billion, surpassing LSEG's (London Stock Exchange) forecast of $41.7 billion. Net income of $14 billion marked a 50% increase from last year’s $9.3 billion.

These record results were driven by market recovery and significantly higher Wall Street trading fees. JPMorgan expects net interest income (NII) to reach $94 billion this year. However, it warns of uncertainty regarding the sustainability of NII growth, which was bolstered by strong demand for higher interest rates, expecting the trend to moderate. The bank also anticipates growth in trading, particularly in credit, currencies, and emerging markets. CEO Jamie Dimon expressed optimism about the U.S. economy but highlighted risks such as inflation, the new U.S. government program, and geopolitical issues.

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Source: Investing.com*

Wells Fargo Forecasts Higher Interest Income

Wells Fargo, another key player in investment banking, also exceeded expectations. Despite a slight decline in Q4 revenue compared to the previous year to $20.4 billion, its net income soared to $5.1 billion, nearly 50% higher than the previous year. The bank reported a 59% increase in investment banking fees to $725 million. NII decreased by 7% to $11.84 billion due to lower interest rates and lower loan balances.

Wells Fargo expects NII to grow this year with an expected rate between 1% and 3% compared to 2024 levels. This is thought to be due to a reduction in deposit costs and a recovery in loan demand.  The bank repurchased 57.8 million shares for $4 billion in its Q4 buyback program, with stock price climbing nearly 43% last year.*

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Source: Investing.com*

Citigroup Plans to Cut Expenses

Citigroup, another major bank, released its earnings for the past week. In Q4 2024, its net income was $2.9 billion, with revenue of $19.6 billion, marking a 12% increase compared to the same period last year. Full-year 2024 net income rose to $12.7 billion, with revenue of $81.1 billion, up 40% from 2023.

Significant growth was also seen in areas like investment banking (35%) and markets (36%). Credit costs decreased, and the bank continues investing to strengthen long-term growth. CEO Jane Fraser stated that 2024 was a key year, with results reflecting the effectiveness of their strategy. Citigroup plans to slightly reduce expenses in the current year, as they increased in the final quarter. The bank also announced a $20 billion stock buyback, with stock prices rising 37% last year.*

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Source: Investing.com*

Goldman Sachs Meets Its Goals

Goldman Sachs closed the quarter, with better-than-expected Q4 results, particularly due to strong trading performance. Net income doubled to $4.1 billion, and revenue increased by 23% to $13.9 billion, driven by growth in equity and bond trading as well as investment banking. Wealth and investment management also saw an 8% increase. Full-year 2024 revenues reached $53.5 billion, with a net income of $14.3 billion.

In the earnings announcement, the Goldman Sachs CEO expressed enthusiasm that they met or exceeded almost all of their five-year targets.  The company also reported progress on its streamlined strategy, focused on providing excellent client services while continuing to grow and invest in scalable businesses.

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Source: Investing.com*

Conclusion

The largest U.S. banks posted strong results in 2024, benefiting from market recovery, increased trading, and investment banking. JPMorgan and Wells Fargo capitalized on higher interest income, Goldman Sachs on strong trading performance, and Citigroup on improved performance in investment banking and markets. All banks are focused on further growth, expense reduction, and increasing shareholder value.

 

* Historical data is not a guarantee of future returns.

Warning! This marketing material is not and should not be construed as investment advice. Historical data is not a guarantee of future returns. Investing in foreign currencies may affect returns due to fluctuations. All securities transactions may result in both profits and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which may change. These statements do not guarantee future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s. regulated by the National Bank of Slovakia.

 

Sources:

https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2024/4th-quarter/36b3c0a4-3ecd-422e-8167-0a31372f3438.pdf

https://www.reuters.com/business/finance/jpmorgan-profit-jumps-dealmakers-traders-ride-market-rebound-2025-01-15/

https://www.cnbc.com/2025/01/15/jpmorgan-chase-jpm-earnings-q4-2024.html

https://finance.yahoo.com/news/wells-fargo-earnings-climb-investment-114933412.html

https://www.cnbc.com/2025/01/15/wells-fargo-wfc-earnings-q4-2024.html

https://www.citigroup.com/rcs/citigpa/storage/public/Earnings/Q42024/4Q24-earnings-press-release.pdf

https://www.cnbc.com/2025/01/15/citigroup-c-earnings-q4-2024.html

 

 

InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s., with its registered office at Slávičie údolie 106, Bratislava – Staré Mesto district, 811 02. The company is registered in the Commercial Register of the Municipal Court Bratislava III, Section: Sa, File No.: 4295/B, ID No.: 36 853 054, VAT No.: 2022505419.

CAPITAL MARKETS, o.c.p., a.s. is a securities dealer pursuant to Section 55(1) of Act No. 566/2001 Coll. on Securities and Investment Services and on Amendments to Certain Acts, as amended (hereinafter the “Securities Act”). On October 30, 2007, CAPITAL MARKETS, o.c.p., a.s. was granted, by Decision No. OPK-2297/2007 of the National Bank of Slovakia -PLP, a license to provide investment services pursuant to Section 54(2) in conjunction with Sections 59(2) and (3) of the Securities Act, which was extended in accordance with the provisions of the Securities Act by Decision No. OPK-1830/2008-PLP dated April 21, 2008, Decision No. OPK-11601-1/2008 dated January 28, 2009, Decision No. ODT-5059-3/2012 dated July 23, 2012, and Decision No. ODT-9332/2014-1 dated October 21, 2014.

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