Wall Street’s big banks were unscathed by the crisis facing regional banks in March, reporting banner profits for the first quarter of 2023.
JPMorgan Chase, Citigroup, and Wells Fargo earned billions more than they or anyone else had expected, the banks announced in mid-April. The Federal Reserve’s interest rate hikes, aimed at reducing inflation, have had a moneymaking effect on banks, enabling them to charge borrowers more than what they pay depositors, according to The New York Times.
The bumper profits may indicate that customers of small, regional banks may be drawn to the perceived stability and security of larger institutions.
The country’s smaller, regional banks will report earnings later in April.
JPMorgan reported a profit of $12.6 billion during the first three months of the year, 52% higher than it was in the first quarter of 2022. The bank said that deposits increased from the three months prior, and inflows were particularly frequent after depositors pulled money from smaller banks, The Times reported.
JPMorgan set aside about $2.3 billion to protect against borrowers’ falling behind on their loans, up from $1.5 billion in the same quarter in 2022.
Citigroup, the US’s third-largest lender, reported a $4.6 billion profit, increasing 7% from a year earlier.
Wells Fargo’s earnings grew as its loan portfolio expanded, led by gains in personal lending and higher credit card balances.
Also, sixth-largest PNC Financial said that the industry volatility had affected profits favorably. Its deposits grew slightly, and profit rose 18% to $1.7 billion.