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October 13, 2017 at 09:48 AM
JPMorgan Chase & Co. and Citigroup Inc. kicked off banks’ earnings season by showing the effects of muted trading and concerns about consumer credit, as well as by addressing some hot topics such as bitcoin.
While both firms beat analysts’ expectations for their bottom lines, they used different ways to get there: JPMorgan relied on improved lending margins, while Citigroup continued to squeeze costs.
Here’s what investors got out of the first day of results.
Trading Declines
For a second straight quarter, low volatility weighed on banks’ fixed-income trading results. JPMorgan executives said performance was more in line with a typical third quarter, and that the steep drop said more about tough comparisons with last year, when activity spiked after the U.K.’s Brexit vote and in the run-up to the U.S. election.
A surprise jump in Citigroup’s revenue from equities trading — a business it’s struggled with in recent years — helped it beat estimates.
Bitcoin Chatter
As bitcoin topped $5,000 for the first time, it was a popular topic on banks’ calls with reporters. JPMorgan Chief Financial Officer Marianne Lake said the lender is “open minded” to getting involved with cryptocurrencies, if they’re properly regulated. That’s a much more measured stance than Chief Executive Officer Jamie Dimon offered last month, when he called bitcoin a “fraud” and said he would fire any employee trading it for being “stupid.”
Citigroup CFO John Gerspach said Thursday that his firm is taking an “intense” look at cryptocurrencies and the blockchain technology that underlies them.
