Big banks galore

Yesterday, Goldman Sachs kicked off earnings season with strong results, but a miss in fixed income trading pushed shares lower. Today, a boatload of big banks reported, giving us a broader look at how financials are holding up amid recent economic mayhem.

Here’s how they fared last quarter:

• JPMorgan Chase beat on both top and bottom lines, delivering its highest-ever Q1 revenue. Fixed income trading was a standout, rising 21%, while loan loss provisions came in lighter than expected, and investment banking fees also climbed 28%. Shares inched 0.82% lower today.
• Citigroup reported a 56% jump in EPS year over year alongside its best quarterly revenue in a decade. Fixed income trading rose 13%, while equities surged 39%. Shares rallied 2.61%, briefly hitting an 18-year high.
• BlackRock’s net income climbed 46% and revenue rose 27%, driven by record inflows of $130 billion. Base fee growth reached 8%, marking its best first quarter in five years, with CEO Larry Fink calling it one of the “strongest starts to a year in the firm’s history.” Shares ticked up 3.02%.
• Wells Fargo beat on earnings but missed on revenue, missed on noninterest income, and missed on net interest income—the latter of which is a key signal for profitability. The bank was released from the Fed’s asset cap in June, but its inability to capitalize on its newfound freedom miffed investors. Shares fell 5.7% on the news.

Private credit in focus

For the most part, the results from these banks show that even amid energy and trade uncertainty, geopolitical conflicts, AI disruption fears, and large government deficits, they’re still holding up pretty well.

But as we discussed yesterday, one looming risk investors are watching closely is private credit. Across the group, banks are sitting on roughly $100 billion in exposure, including $22 billion at Citigroup, $36.2 billion at Wells Fargo, and $50 billion at JPMorgan Chase.

“While we cannot predict how these risks and uncertainties will ultimately play out, they are significant and they reinforce why we prepare the firm for a wide range of environments,” JPMorgan CEO Jamie Dimon said.

For now, there seems to be a growing divide in how banks are positioning for what’s ahead. JPMorgan’s relatively modest increase in loan loss provisions suggests confidence that credit conditions remain stable, while Goldman Sachs’ larger buildup points to a more cautious stance. Investors will have to wait and see how private credit ultimately holds up, and which view proves right.—SY