From Breakingviews - Big bank investors owe thanks to Team America
. It’s the Federal Reserve that engineered rising rates, low levels of customer defaults, and capital and liquidity buffers that make failure of these banks unthinkable. Elsewhere in Dimon’s letter, he describes himself as a “red-blooded, patriotic, free-enterprise and free-market capitalist.” Investors may lap that up, but his bank’s earnings show other forces at work too.
JPMorgan, the biggest U.S. lender by assets, reported $12.2 billion of quarterly earnings attributable to common shareholders, a 55% increase on the same period a year earlier. The bank run by Jamie Dimon took a $2.3 billion charge for bad debt, compared with $1.5 billion in the previous first quarter.
The bank’s deposits increased by $33 billion between Dec. 31 and March 31, the period during which three mid-sized firms – Silvergate, SVB Financial and Signature Bank – all failed, causing a wave of deposit movement toward larger lenders. Wells Fargo reported $4.7 billion of earnings, 34% higher than the previous first quarter, and took a $1.2 billion quarterly provision for credit losses. Citigroup reported $4.3 billion of earnings, a 7% annual increase, while smaller rival PNC made $1.6 billion, an 18% increase.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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