Zinger Key Points
- Major U.S. banks delivered stronger-than-expected fourth-quarter earnings, with robust net interest income and upbeat guidance.
- Financial stocks rallied, with the Financial Select Sector SPDR Fund rising 1.9% and the SPDR S&P Regional Banking ETF up 3.1%.
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Major U.S. banks reported strong fourth-quarter 2024 earnings on Wednesday, with better-than-expected results across the board and upbeat 2025 guidance.
The performance was driven by robust net interest income (NII), resilient fee revenue, and disciplined expense management.
These positive earnings results sent financial stocks higher, with the Financial Select Sector SPDR Fund XLF rising 1.9% on Wednesday, eyeing the strongest one-day rally since Nov. 6, 2024, when financial stocks rallied in response to Donald Trump‘s victory at the presidential elections.
The SPDR S&P Regional Banking ETF KRE jumped 3.1%, reflecting strength among regional banks.
Bank Earnings In Focus
JPMorgan Chase & Co. JPM reported fourth-quarter earnings per share of $4.81, far exceeding the consensus estimate of $4.11, representing a 17% surprise, according to Benzinga Pro data.
Revenue came in at $43.74 billion, beating estimates by 4.9%. The bank's strong performance was attributed to higher NII, which totaled $94 billion for 2025 guidance, above expectations, along with lower-than-anticipated credit costs.
The world’s largest bank repurchased $4 billion in shares during the quarter, bringing its Common Equity Tier 1 ratio to 15.8%, up 30 basis points quarter-over-quarter.
Shares of JPMorgan Chase & Co. rose 0.5% by 10:00 a.m. in New York.
Goldman Sachs Inc. GS delivered a standout performance with EPS of $11.95, a sharp 45.4% surprise over the $8.22 consensus. Revenue reached $13.87 billion, 11.9% above estimates, driven by strong trading revenue, up by 13%, and better-than-expected equity underwriting, up 41%.
According to Bank of America analysts, Goldman remains “a favored way to gain exposure to rebounding investment banking activity.”
The bank repurchased $2 billion in shares and ended the quarter with a 15% CET1 ratio. Return on equity for 2024 stood at 12.5%, slightly below the bank’s mid-teens target but still solid.
Goldman Sachs rallied 6% in response to fourth-quarter results, reaching highs last seen in early December 2024 and eyeing the strongest 1-day rally since Nov. 6 2024.
Read also: Goldman Sachs Q4 Earnings: Underwriting Boosts Revenue, Assets Reach Record $3.14 Trillion
Wells Fargo Corp. WFC posted EPS of $1.42, beating estimates by 5.2%, driven by stronger-than-expected NII and fee revenue.
Overall revenue was slightly below estimates at $20.38 billion, yet the bank's 2025 guidance surprised to the upside, with NII expected to grow 1-3% year-over-year, implying $48.98 billion—higher than analyst expectations.
Wells Fargo's CET1 ratio stood at 11.1%, down 20 basis points quarter-over-quarter, but the bank returned $4 billion to shareholders through buybacks.
Credit trends remained stable, and expenses were well-managed, positioning the bank for a solid year ahead.
Shares of Wells Fargo roared 5.7% to early December highs.
Citigroup Inc. C reported EPS of $1.34, beating the $1.22 consensus by 9.8%, while revenue of $19.58 billion narrowly exceeded expectations.
The results reflected solid execution across the bank's core operations, with a particular boost from strong trading revenues.
Though the bank still faces challenges in certain areas, analysts at Bank of America see improving operational efficiency and regulatory easing as potential tailwinds.
Citigroup's stock rose 5.7% following the earnings release, reflecting growing investor optimism.
Bank of New York Mellon Corp. BK posted EPS of $1.72, exceeding estimates by 10.3%, while revenue of $4.85 billion beat projections by 4.2%. The results were driven by robust pre-provision net revenue growth, up 9.5% year-over-year, fueled by NII growth of nearly 14%.
The bank achieved its medium-term targets of a 33% pre-tax margin and 23% return on tangible common equity (ROTCE), highlighting disciplined expense management.
Shareholder returns were also strong, with $1.1 billion returned in the fourth quarter, including $750 million in buybacks.
Shares rallied by 5.7%, eyeing their highest one-day surge since July 2022.
Looking Ahead
The market spotlight will shift to Bank of America Corp. BAC, Morgan Stanley MS, U.S. Bancorp USB, First Horizon Corp. FHN, PNC Financial Services Group Inc. PNC, and M&T Bank Corp. MTB all slated to report earnings on Thursday, before the market open.
Here's what investors will be watching, according to Benzinga Pro data:
| Bank | Estimated Revenue | Estimated EPS |
|---|---|---|
| Bank of America Corp. | $25.24 billion | $0.77 |
| Morgan Stanley | $15.03 billion | $1.70 |
| PNC Financial Services Group Inc. | $5.50 billion | $3.33 |
| U.S. Bancorp | $6.99 billion | $1.05 |
| M&T Bank Corp. | $2.34 billion | $3.73 |
| First Horizon Corp. | $820.7 million | $0.39 |
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