The business results of major US banks for the fourth quarter of 2023 were not welcomed by investors with enthusiasm. Only JPMorgan was able to provide some relief thanks to a solid forecast for the current year.
The presented numbers of the banks also put pressure on the prices of European banks. For example, shares of Deutsche Bank temporarily experienced a loss of 0.89 percent to 12.09 euros. In contrast, JPMorgan shares temporarily rose by 2.33 percent to 174.26 US dollars in NYSE trading.
The US mega bank JPMorgan achieves highest profit in its history in fiscal year 2023 thanks to significantly higher interest rates. With nearly $50 billion (equivalent to 45 billion euros), the financial institution reported a nearly one-third increase compared to the previous year.
The interest margin, or the difference between received and paid interest, also reached a record value of around 89 billion US dollars. Bank CEO Jamie Dimon anticipates a further increase to approximately 90 billion dollars for the year 2024.
JPMorgan stock rose by two and a half percent in pre-market US trading. If it were to rise similarly strongly in regular trading, it would surpass the record high achieved just last week.
In the fourth quarter, however, the bank had to face an unexpected decline in profits. Although interest income could be increased by almost one fifth, the result was burdened by higher provisions for potential loan defaults as well as increased costs.
The deposit of 2.9 billion US dollars into the deposit insurance fund last year, particularly due to the collapses of Silicon Valley Bank and Signature Bank, had a significant impact.
Bank of America's profits declined in 2023 despite higher interest rates and lower taxes. The company reported a profit of $26.5 billion (equivalent to 24.2 billion euros), which was approximately one billion lower than the previous year, according to an announcement made by the company in Charlotte, North Carolina, on Friday.
In the fourth quarter, profits even decreased by more than half. Investors showed dissatisfaction and caused the Bank of America's stock to lose around two percent in value in pre-market US trading. In the fourth quarter, the second-largest US bank only earned 3.1 billion US dollars, falling below analysts' expectations.
The earnings declined by ten percent to 22 billion US dollars compared to the previous year. In addition, the deposit of 2.1 billion US dollars into the deposit insurance fund due to the collapses of Silicon Valley Bank and Signature Bank weighed heavily and thus burdened the quarterly result.
