Even though JPMorgan Chase and Wells Fargo, reported solid earnings, their reports showed weakness in deposits and declines in net interest income
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Today we go back to the comment of Andria Pichdi from HF Markets, who talked bank earnings some time ago.
FXMAG.COM: Banks earnings turned out to be quite impressive. Could you please comment on this fact, in context of recent banking sector turmoil?
Andria Pichdi (HF Markets): Indeed, many of the biggest banks reported solid earnings and revenue gains for Q1 2023, however the US recession fears, elevated mortgage rates, and the risk of more bank failures persist! Even though the Banks, e.g JPMorgan Chase and Wells Fargo, reported solid earnings, their reports showed weakness in deposits and declines in net interest income, along with increased loan loss provisions. That said, worries increased that a worsening credit contraction from the SVB fallout will exacerbate weakness in the economy in 2H. Credit was already tightening before the early March banking turmoil and the Fed's Beige Book in April noted some "sharp" and "significant" deterioration in financial conditions in the San Francisco and New York Districts. But there are worries over knock-on effects rippling across the nation.
