US bank earnings round two: What will this week have in store for Goldman Sachs, Morgan Stanley and Bank of America?

Hayley Kirton
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Goldman Sachs Profits Fall 70 Percent
What will week two for US banks' earnings bring? (Source: Getty)

It's set to be another big week on Wall Street, with another slew of banking giants due to announce earnings.

Bank of America Merrill Lynch will share how it performed in its most recent quarter on Monday, while Goldman Sachs is set to do the same on Tuesday. Morgan Stanley will be reporting on Wednesday, and Bank of New York Mellon will declare its latest digits on Thursday.

An analysts' consensus pegs Goldman's predicted earnings per share at $3.00, much higher than the $1.98 earnings per share reported for the same period last year. However, litigation provisions did blow a $2.77-shaped hole in the earlier year's figure.

The prediction for the second quarter would also be an improvement on the first quarter's $2.68 earnings per share.

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Meanwhile, a poll of analysts by Thomson Reuters put earnings per share for Bank of America at $0.33 and revenue at $20.4bn (£15.5bn). In the same period last year, the bank brought home earnings per share of $0.45 and revenue of $22.3bn.

Hopes might be higher than expected among investors after JP Morgan and Citigroup announced better than expected earnings last week.

Even though net income at JP Morgan slipped one per cent year-on-year, the results still comfortably beat expectations, lifting the S&P 500 higher on Thursday.

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The drop was more drastic for Citigroup, where adjusted net income fell by 14 per cent and revenues by eight per cent, but the figures ultimately came in above analysts' expectations too. Wells Fargo, meanwhile, managed to match expectations.

The second quarter of 2016 has not been the most business friendly as far as banks are concerned. Not only have lenders had to contend with low interest rates over a long time period, they have also had to navigate their way through a period of uncertainty brought about by the UK's referendum on EU membership.

Meanwhile, a quiet M&A market will have done little to boost banks' prospects as of late. Research published by Dealogic earlier this month discovered that turnover among European investment banks had plummeted to a 14-year low, thanks, in part, to companies postponing their investment decisions because of the referendum.

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