Jefferies analyst Ken Usdin provided a summary of second-quarter profits for the 36 large and mid-sized banks in their coverage universe. Despite challenges to bank fundamentals, the results were more positive than anticipated due to the impact of higher interest rates on bank loan yields.
One standout among large-cap banks was JPMorgan Chase & Co. (JPM). Jefferies noted that they had revised their estimated 2023 net interest income (excluding markets results) upward from $81 billion to $87 billion, earning praise for their performance.
- JPMorgan Chase, Wells Fargo, and Citi surpass earnings targets, but economic uncertainty persists.
- Morgan Stanley’s profit decreases but surpasses expectations, leading to a significant stock increase.
- Goldman Sachs’s stock enters positive territory for 2023 despite mixed Q2 results.
In terms of Jefferies’ top picks among the largest U.S. banks, they favor JPMorgan Chase, Goldman Sachs Group Inc. (GS), and Morgan Stanley among brokers. They also consider Wells Fargo & Co. (WFC) a “revision winner” among banks for raising their outlook on pre-provision net revenue.
When analyzing the 18 large banks that Jefferies closely follows, their preferred choices for the quarter include Bank of New York Mellon (BK) over State Street Corp. (STT) among trust banks. Additionally, they favor Fifth Third Bancorp (FITB) and Comerica Inc. (CMA) among larger banks.
Jefferies also covers a range of other banks, including Citigroup Inc. (C), M&T Bank Corp. (MTB), Zions Bancorp (ZION), Regions Financial Corp. (RF), Huntington Bancshares (HBAN), Bank of America Corp. (BAC), Northern Trust Corp. (NTRS), U.S. Bancorp (USB), Citizens Financial Group (CFG), PNC Financial Services Group Inc. (PNC), Truist Financial Corp. (TFC), and KeyCorp. (KEY).
Mid-Cap Banks Receive Praise for Strong Q2 Results
Mixed Fees and Costs, Lower Provisions
Capital Return Expectations Remain Low
Decrease in Net Interest Income
Factors Affecting Profitability
Deposits and Expectations for the Future
Performance of Largest U.S. Banks
Laggards in Net Interest Income
Positive Market Sentiment Boosts Bank Stocks
Also read: First Citizens BancShares Q2 profit boosted by addition of Silicon Valley Bank