The Banking and Strategy Initiative

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Bank Results Season: JP Morgan kick off earnings for a $4.46 year, Citi fireworks next

Banks have been hurting terribly.

The street is agog though, with news of banks having outscored on loans. In JP Morgan’s case, this increase in loans could be engendered thru its own syndication of deals like KKRs buy of the Schusterman shale plot.


Despite significant changes in December, the Business week summary snapshot for JP Morgan (NYSE:JPM) record a 91 cent consensus for the quarter and a $4.46 for the year as the bank starts off results season after Alcoa reported good numbers in the week. JP Morgan will report below $ 4 bln in profits tomorrow as its last revenues in September were a $6.5 bln in the GReek quarter including a $2 bln in DVA. The bank is still rewarded as the largest by market cap with a $140 bln cap discountingWells Fargo that gets more premium valuations at $156 bln in Market Cap and is a no. 4 in assets at $1.3 Tln. Citi reports on Tuesday and has already covered a lot on market cap in this week itself shares trading above $31 to $91 bln in cap. Bank of America has recovered to just under $7 per share for

A reported profit of $ 5 per share for 19 bln in Full year profits and will likely come 10 percent lower to consensus estimates as the year’s second half deteriorated trading conditions further than the improved well oiled American Bank machinery on show in 2009 and 2010. The Big 4 from the USA and Wells Fargo entered the crisis with better capitalisation in Tier I common and exit with the same as European banks still struggle with further deleveraging , French top 3 needing another $12 bln after stating Q4 with a gap of $80 -90 bln in Capital to reach the new Tier I common criteria of 6% and a surcharge of 1-2.5% on the 29 G SIFI banks

The new Volcker rule further constrains trading revenue by a good 25% in its current form blocking flow trading for market making as welll, requiring all trades to be sanction by reason of “demand from client” and not from “expectations of future increase in price” Citi will report full year revenues under $80 bln, JP Morgan waiting another 3-4 years before it hits the $100 bln mark in revenue, much lower excl DVA

Bank of America will likely go to $0.73 cents from the available consensus after latest loan loss reserve news put its 4Q earnings of 20 cents a share in danger, revenues a hard $95 bln after the first loan loss reserves in Q1 and the new ones wipe out full year revenue to $63 bln

Goldman Sachs will rpeport full year revenues of $30 bln and a $5.71 EPS as it recalibrates to trading income limitations and cuts costs by pay cuts for its top 400 partners by between $3 – $ 6 bln


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