You can find an overview of bank earnings in Q3 2023 here:
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- JP Morgan, Wells Fargo and Citi Group topped revenue and earnings estimates in Q3.
- PNC Financial Services revenue missed estimates while EPS topped estimate.
- However, their loan net charge-off grew quarter-over-quarter while deposits declined by single digits.
- Wells Fargo and Citi Group net interest margin rose sequentially while that of PNC Financial Services declined.
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Good clear format in the Wiki.
From what I heard net charge offs and credit loss provisions have been substantially below expectations. Could you add those expectations to the wiki?
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From the Quarterly Banking Profile Q3 report:
The banking industry continued to show resilience in the third quarter. Net income remained high, overall asset quality metrics remained favorable, and the industry remained well capitalized. Despite a modest improvement in the industry’s net interest margin, funding pressures continued to challenge the industry.
Though the U.S. economy has remained strong in 2023, the banking industry still faces significant downside risks from the continued effects of inflation, rising market interest rates, and geopolitical uncertainty. These issues could cause credit quality, earnings, and liquidity challenges for the industry.
- The banking industry reported net income of $68.4 billion in the third quarter, down $2.4 billion (or 3.4 percent) from the prior quarter.
- Net operating revenue fell 1.3 percent from second quarter 2023 to $249.3 billion.
- Unrealized losses on available–for–sale and held–to–maturity securities totaled $683.9 billion in the third quarter, up 22.5 percent from the prior quarter, primarily due to an increase in mortgage rates. These unrealized losses represent a drag on future earnings as these securities tend to be long term and fixed rate, while funding costs continue to increase.
- The third quarter liquid–assets–to–uninsured–deposits ratio declined to 82.8 percent because of a reduction in securities.
- Noncurrent loan balances grew at a faster pace than the allowance for credit losses, resulting in a decline in the reserve coverage ratio. The ratio of the allowance for credit losses to noncurrent loans fell from a peak of 224.8 percent last quarter to 209.9 percent this quarter.
FDIC: Speeches, Statements & Testimonies - 11/29/2023 - Remarks by FDIC Chairman Martin Gruenberg on the Third Quarter 2023 Quarterly Banking Profile
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