US bank earnings season starts with earnings growth expected from JP Morgan, Citigroup and Bank of America

Jasper Jolly
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J.P. Morgan's Fourth Quarter Income Drops Over 30 Percent
JP Morgan Chase will be among the banks to report earnings (Source: Getty)

Wall Street investors expect US banking giants to confirm earnings growth across the board in figures to be revealed this week, despite low volatility weighing on trading revenues.

Lenders Citigroup and JP Morgan Chase will report on their third-quarter performance on Thursday, while Wells Fargo, Bank of America and PNC Financial will reveal their update on Friday 13 October.

American banks have benefited in recent weeks from a perceived increased likelihood of a further interest rate hike from the US Federal Reserve.

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The intention of US President Donald Trump to ease regulation and cut corporate tax rates has also added further impetus to banking shares, which have risen by almost 12 per cent in the past month, according to the KBW banks index.

Investment behemoth Blackrock will also unveil its third-quarter figures on Wednesday.

Analysts are expecting JP Morgan Chase to report earnings per share, a key metric for investors, of $1.66 (£1.27), an increase from the $1.58 recorded in the same period last year, although consensus forecasts show revenues falling year-on-year to reach $25.3bn.

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Citigroup earnings per share are forecast to hit $1.30, above the $1.24 level recorded in the third quarter of 2016.

Wells Fargo earnings could be flat year-on-year, after a string of scandals which have tarnished the brand, while consensus expectations for Bank of America see an earnings per share increase to $0.46, after a $0.41 reading last year which massively overperformed even the strongest expectations.

Banks could be further boosted in the coming weeks by the Federal Reserve’s plans to unwind its balance sheet, which could boost long-term interest rates by removing demand from the market. That could help boost banks’ net interest income.

Read more: What to expect from US bank second quarter earnings figures

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