trending Market Intelligence /marketintelligence/en/news-insights/trending/Skc88N3SRF8nTNLM_V6dHg2 content esgSubNav
In This List

Bank stocks rise after 1st wave of Q3 earnings


Banking Essentials Newsletter: 7th February Edition

Case Study

A Bank Outsources Data Gathering to Meet Basel III Regulations


Private Markets 360° | Episode 8: Powering the Global Private Markets (with Adam Kansler of S&P Global Market Intelligence)


Banks’ Response to Rising Rates & Liquidity Concerns

Bank stocks rise after 1st wave of Q3 earnings

Investors sent shares higher for several banks reporting before markets opened on Oct. 15.

First Republic Bank shares rose the most, up 6.59% as of 1:05 p.m. ET after the bank reported its third-quarter earnings. The San Francisco-based company reported EPS of $1.31, an increase from $1.19 in the year-ago period and beating S&P Global Market Intelligence consensus estimates of $1.21.

Net interest income grew to $695 million from $634.5 million, but First Republic saw pressure on its net interest margin. Its third-quarter NIM of 2.80% was a decrease from 2.85% in the previous quarter and 2.94% in the year-ago period.

Markets also rewarded JPMorgan Chase & Co.'s third-quarter earnings results, with shares up 4.01% as of 1:07 p.m. ET. The bank posted EPS of $2.68, ahead of estimates of $2.45.

Bank management presented slightly improved guidance for full-year net interest income to reflect a rebound in 10-year U.S. Treasury yields during an earnings call.

Citigroup Inc. and Wells Fargo & Co. shares also rose after reporting earnings, with shares up 1.92% and 3.52%, respectively, as of 1:10 p.m. ET. Citi's third quarter EPS of $2.07 beat estimates of $1.95 but Wells Fargo missed expectations of $1.22 with its reported EPS of 92 cents.

Wells Fargo's quarterly results include adding $1.6 billion to legal reserves related to its retail sales practices, which dragged down EPS by 35 cents.

Both banks saw continued pressure on their NIM. Citi's third-quarter NIM was 2.56%, a decrease from 2.65% in the previous quarter and 2.70% in the year-ago period, while Wells Fargo's NIM of 2.66% represented a 16-basis-point decline from the previous quarter and a 28-basis point decline from the year-ago period. A lower interest rate environment has resulted to Citi and Wells cutting their net interest revenue growth and net interest income projections, respectively.

Elsewhere, Goldman Sachs Group Inc.'s shares opened with a drop of almost 3% before the stock regained most of the losses. The company reported a 27% drop in net income from the prior-year period.

As of 1:07 p.m. ET, the SNL U.S. Bank Index was up 2.60% to 592.63. The S&P 500 was up 1.14% to 3,000.05.

S&P Dow Jones Indices and S&P Global Market Intelligence are owned by S&P Global Inc. Market prices and index values are current as of the time of publication and are subject to change.