Factbox: Big U.S. banks fail to impress, Morgan Stanley stands out

REUTERS - Most big U.S. banks reported better-than-expected quarterly profits but failed to enthuse investors who were looking for better results and a sunnier outlook.

However, Morgan Stanley, which wrapped up big bank earnings on Wednesday, managed to pull a rare feat in producing more trading gains than rival Goldman Sachs.

While trading and mortgage lending remained weak, the banks started to see some long-awaited benefits of higher interest rates.

A snapshot of the earnings of the banks that reported:

JPMorgan Chase & Co

Bank of America Corp:

• Earnings (beat) - EPS 46 cents vs est. 43 cents

• Revenue (beat) - $22.83 bln vs est. $21.78 bln

 

• Story - http://reut.rs/2tbjKUE

• Helped by:

- Rise in net interest income, up 8.6 pct to $10.99 bln

- Jump in profit from consumer banking business; up 21.4 pct at $2.03 bln

- Higher efficiency ratio, up at 59.51 from 62.73 y-o-y

• Hurt by:

- 9 pct fall in trading revenue, mainly due to a 13.8 pct drop in FICC revenue

• Forecast:

- Expect 3Q17 markets results to face tough comparison with exceptionally strong 3Q16 - CFO

- Expects higher net interest income in Q3 vs Q2, as long as 'forward yield curve is realized and we see some loan and deposit growth' - CFO

- Will hire 200 bankers in global banking unit by end of 2018 - CEO

- Still very confident about hitting $53 bln expense target for FY2018 - CFO

• Comment:

- "Not interested in acquisitions to deploy excess capital: We just don't need the distraction" - Chief Executive Officer Brian Moynihan

Wells Fargo & Co:

Citigroup:

Goldman Sachs Group Inc:

• Earnings (beat) - EPS $3.95 vs est. $3.39

• Revenue (beat) - $7.90 bln vs est. $7.52 bln

• Story - http://reut.rs/2vxLrbl

• Helped by:

- Dip in operating expenses, down about 2 pct at $5.4 bln

• Hurt by:

- Slump in bond trading revenue, down 40 pct

- Drop in investment banking revenue, falls 3.2 pct

• Forecast:

- To improve bond trading broadly, Goldman is looking for ways to do more business with existing clients - CFO Marty Chavez

• Comment:

- "Commodities is a story of challenges on all fronts, it was lower client activity and difficult market making environment" - CFO

Morgan Stanley:

• Earnings (beat) - EPS 87 cents vs est. 76 cents

• Revenue (beat) - $9.50 bln vs est. $9.09 bln

• Story - http://reut.rs/2uzslEO

• Helped by:

- Higher underwriting gains drive investment banking revenue

- Wealth management revenue up 9 pct at $4.2 bln

• Hurt by:

- Bond trading falls 4 pct to $1.3 bln

• Forecast:

- We are on track to complete project Streamline - CFO Jon Pruzan

- Uncertainty over taxes, regulatory reform likely to weigh on M&A activity - CFO

• Comment:

- "This quarter's results reaffirm that our strategy is working...this quarter represented an important test of our model" - CFO

BREAKINGVIEWS:

BofA's progress fails to achieve escape velocity

Goldman's compass points in wrong direction

Morgan Stanley gives Goldman a lesson in diversity

Citi, JPMorgan and Wells show reliance on D.C.

(Reporting By Aparajita Saxena, Nikhil Subba and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)