Major US Banks Expected to Deliver Q2 Earnings Surprise

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Major U.S. banks scheduled to announce their second-quarter earnings next week are expected to report surprise results that exceed market expectations, according to major foreign media on the 8th (local time).

According to reports, analysts forecast that the second-quarter net profits of the four major U.S. banks?Bank of America (BoA), Citigroup, JP Morgan, and Wells Fargo?will reach $24 billion (approximately 27.5328 trillion KRW).

This is four times the $6 billion recorded in the same period last year.

Net profits of BoA, Citi, and JP Morgan more than doubled in one year, and Wells Fargo is expected to return to profitability this year after posting an annual loss last year.

These four major banks had set aside $33 billion in loan loss provisions just a year ago as Americans faced financial difficulties due to the COVID-19 pandemic.

However, thanks to the government's massive economic stimulus measures and loan repayment deferrals, large-scale losses did not materialize.

Additionally, as the U.S. economy has recovered from the COVID-19 shock with the help of vaccine distribution, the loan loss provisions for these banks in the second quarter are estimated to be less than $1 billion.

Starting with Goldman Sachs and JP Morgan on the 13th, the second-quarter earnings announcements of major Wall Street banks will continue next week.

Meanwhile, U.S. CNBC reported that Wells Fargo plans to discontinue the launch of new credit limit products for individual customers within the next few weeks and will also close existing credit limits.

This content was produced with the assistance of AI translation services.