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Bank earnings preview: Week ending Jan. 18

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Bank earnings preview: Week ending Jan. 18

The U.S. banking industry's fourth-quarter 2018 earnings season kicks off in the week of Jan. 14 through Jan. 18. Analysts expect JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co. and Citigroup Inc. — the four biggest U.S. banks in terms of market capitalization — to deliver higher fourth-quarter earnings, year over year.

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Citi, scheduled to report earnings before markets open on Monday, Jan. 14, reported a net loss of more than $7.38 per share in the 2017 fourth quarter, which included a one-time charge as a result of tax reform. For the 2018 fourth quarter, the S&P Global Market Intelligence consensus estimate for normalized earnings per share is $1.58.

JPMorgan and Wells Fargo are on deck to report results before markets open on Tuesday, Jan. 15. JPMorgan reported earnings per share of $1.07 in the fourth quarter of 2017 and analysts expect the bank to report fourth-quarter 2018 EPS of $2.23.

Meanwhile, analysts project San Francisco-based Wells Fargo's fourth-quarter 2018 EPS to be $1.18, higher than the year-ago quarter's $1.16.

Wells Fargo President and CEO Timothy Sloan, during a Dec. 4, 2018, investor presentation, said the bank is on track to achieve its expense targets of between $53.5 billion and $54.5 billion in 2018. He added that total technology expense for 2018 is expected to increase 10% year over year, to approximately $9 billion, which includes about $800 million specifically for cybersecurity. Wells Fargo also expects commercial and industrial loans to increase in the 2018 fourth quarter on a linked-quarter basis, while commercial real estate loans are expected to continue to decline. Sloan added that home equity and auto loan balances are projected to decline, while auto loan originations are expected to increase.

And on Wednesday, Jan. 16, Charlotte, N.C.-based BofA is scheduled to report its earnings results before markets open. Analysts expect the bank to report 2018 fourth-quarter EPS of 64 cents, up from the year-ago figure of 20 cents.

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