Upbeat banking earnings bonanza predicted this week, as analysts forecast revenue bump for JP Morgan

Hayley Kirton
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Analysts predict a modest rise in JP Morgan's sales figures (Source: Getty)

All eyes will be on Wall Street later this week, as the US' banking behemoths get set to reveal their fourth quarter, and latest full-year, results.

JP Morgan, Wells Fargo and Bank of America are scheduled to be the first out of the gate, as the trio are due to deliver their results on Friday 13 January.

JP Morgan, a global heavyweight in the investment banking arena, is likely to be particularly closely watched. According to a consensus of analysts compiled by Yahoo Finance, the lender is predicted to report revenues for its full-year 2016 of $97.7bn (£79.5bn), up 1.1 per cent on 2015's $96.6bn.

However, JP Morgan's bottom line is forecast to have been squeezed over the last year, with earnings per share predicted to drop to $5.91, down from $6.00 the year before.

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For its fourth quarter, JP Morgan is slated to announce revenues of $24bn, up 0.9 per cent from $23.7bn in the same period the year before, and earnings per share of $1.43, up from $1.32.

It's expected to be a similar story for revenues at Bank of America and Wells Fargo, despite the latter having recently been embroiled in a scandal over claims its employees had been pushed to sign up customers for products without their knowledge or consent.

The analysts' consensus pegged Bank of America's revenue for 2016 at $85bn, up 0.9 per cent from $84.2bn the year before, and Wells Fargo's revenue at $89.2bn, up 3.6 per cent from $86.1bn.

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Investors have been bullish on banking as of late and if Friday brings strong results for the sector, it could help to push Wall Street higher.

"If the performance of the share prices in the last couple of months is anything to go by, they will be good," said David Buik, market commentator at Panmure Gordon. "We have had one Fed rate increase and the market expects another two in 2017. Also, if much of the Dodd-Frank bill is repealed, these shares will push on."

Tim Ghriskey, chief investment officer of Solaris Group, added he expected an upbeat earnings season, particularly since there is now the prospect of lighter touch regulation from incoming President Donald Trump.

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"The outlook that management will provide and the tone that management will provide will likely be favourable," Ghriskey said.

The following week will also be busy, with Morgan Stanley announcing fourth quarter results on Tuesday 17 January and then Citigroup and Goldman Sachs on the Wednesday.

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