Fly Intel: What to watch in first round of big bank earnings reports
JPMorgan (JPM) and Wells Fargo (WFC) are scheduled to report quarterly results before the open on April 12, while Citigroup (C) is expected to report on April 15. What to watch for: 1. OUTLOOKS: During the company's last earnings call, JPMorgan said it sees first quarter net interest income approximately flat quarter over quarter, market dependent, and first quarter expense up mid-single digits year over year. On February, the company backed medium-term ROTCE view of about 17%, and said it sees 2019 expenses of less than $66B. Reiterating a flat quarter over quarter net interest income, JPMorgan said in its annual report last week that it expects markets revenue for the first quarter of 2019 to be lower when compared with the prior-year quarter by high teens percentage points on a reported basis, and by low double-digit percentage points excluding the impact of the recognition and measurement accounting standard in the first quarter of 2018. Management expects full-year 2019 net interest income, on a managed basis, to be in excess of $58B, reflecting the annualized impact of 2018 interest rate increases, as well as expected loan and deposit growth. Additionally, JPMorgan expects full-year 2019 net charge-offs to be less than $5.5B, higher than 2018, driven by growth. Meanwhile, Citi CFO Mark Mason said that the bank has sped up some of its 2019 plans to reduce costs through "simplification" of its organization and improvements in its internal processes, according to Reuters, citing the executive's comments at an investor conference back in March. The CFO added that first quarter revenue from fixed-income and equity trading appears like it will be down by percentages in the "high single-digits" from a year earlier, the report noted. 2. CEO DEPARTURE: Wells Fargo announced on March 28 that CEO and President Timothy Sloan had informed the company's board of directors of his decision to retire from the company, effective June 30, and to step down as CEO, president, and board member effective immediately. The board has elected C. Allen Parker, who served as the company's General Counsel, as interim CEO and President and member of the board, effective immediately. An external search process will now begin for the company's new CEO and President. 3. CRYPTOCURRENCY: JPMorgan engineers have created the "JPM Coin," a digital token that will be used to instantly settle transactions between clients of its wholesale payments business and the first cryptocurrency created by a major U.S. bank, CNBC's Hugh Son reported. While JPMorgan's Jamie Dimon has bashed bitcoin as a "fraud," the CEO and his managers have consistently said that blockchain and regulated digital currencies held promise. Last month, Citigroup decided to drop its unannounced plan for a bank-backed cryptocurrency, which was codenamed "Citicoin," CoinDesk's Ian Allison reported, noting the parallels with JPMorgan's "JPM Coin." The lender found that, while the technology has potential, there were other and more effective and efficient ways of streamlining payments, Allison noted. 4. HEALTHCARE JV: Last month, the health care organization founded by Amazon (AMZN), Berkshire Hathaway (BRK.A, BRK.B), and JPMorgan Chase, has announced it will be called "Haven," and launched a new website at www.havenhealthcare.com.