With the market monitoring the signals of the Federal Reserve – the American central bank -, in relation to monetary policy, attention falls this Friday (14) on the release of results for the fourth quarter of 2021 of major banks in the United States: Citibank , JPMorgan and Wells Fargo.
The data is closely watched for the outlook for this year, particularly in relation to interest rates and signals about lending and momentum in trading and capital markets.
In the coming days, investors should also monitor the balance sheets of other financial institutions such as Bank of America, Goldman Sachs and Morgan Stanley.
US stocks opened the trading session this Friday in a fall. Around 12:20 pm (Brasilia time), the Dow Jones was down 0.43% and the S&P was operating flat. Nasdaq turned up and was up about 0.5%.
Investors interpret the good results of banks as signs that the country’s economy is buoyant, which could lead the Federal Reserve to accelerate the withdrawal of stimulus.
Yesterday, the vice president of the institution Lael Brainard brought speeches interpreted as “harsh” in her hearing in the Senate. She stated, for example, that the monetary institution of the largest economy in the world must finalize the tapering, the purchase of bonds, already in the first quarter of this year and that, after the end of this process, the Fed will be ready to raise interest rates.
Check below the main highlights of the results and the performance of the shares:
In the fourth quarter, Citibank reported net income of $3.2 billion, down 26% year-on-year. Earnings per share came in at $1.46, up from the $1.38 expected by economists polled by Refinitiv. In the accumulated of 2021, the net income was in the order of US$ 22 billion, practically double the registered in 2020.
The bank cited an increase in expenses, adding that the results included a “pre-tax impact” of about $1.2 billion related to the sale of its Asian consumer banking business.
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“We continue to make steady progress in executing our strategy, as demonstrated most recently by the signing of an agreement to sell four consumer businesses in Asia,” CEO Jane Fraser said in a statement. “We continue to transform our bank with a focus on simplification and building a culture of excellence.”
In addition to the retail arm in Asia, Citigroup also announced the sale of the retail bank in Mexico, with the aim of focusing on its institutional presence in the country. From now on, Citi must focus its efforts on wealthy clients and payments.
On the American stock exchange, Citibank’s shares were down 2% around 12:20 pm (Brasília time), trading at US$ 66.34.
The bank reported net income of $10.4 billion in the fourth quarter of 2021, down from $12.1 billion in the same period a year earlier. Earnings per share were $3.33, beating expectations of $3.01, according to analysts surveyed by Refinitiv.
Net revenue was US$29.3 billion, slightly below the previous year (US$29.6 billion). Already managed revenue was US$ 30.3 billion, above the consensus of US$ 29.9 billion, according to a survey by the Refinitiv.
The bank also reviewed its guidance and lowered its expectations for this year. Now, JPMorgan expects net interest income of about $50 billion in 2022.
The financial institution also expects about $77 billion in adjusted interest-free expenses, up from $70.9 billion in 2021.
This Friday, around 12:20 pm (Brasília time), the bank’s shares were down 4.4% on the NYSE, trading at US$ 160.65.
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Wells Fargo (WFC)
On Friday, the bank announced better-than-expected results for the fourth quarter. In the period, revenue was US$ 20.856 billion, above the expectations of economists consulted by the Refinitiv, of R$ 18.8 billion.
Net income for the quarter was $5.75 billion, up 86% from $3.09 billion a year earlier. Adjusted earnings per share were $1.25, also higher than the expected $1.13, according to consensus. Refinitiv.
According to the company, the result was boosted by a release of $875 million in reserves that the bank had set aside during the pandemic to protect against widespread loan losses.
On the American stock exchange, shares were up 3.3%, with shares traded at US$ 57.87.
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