Morningstar Analyst Discusses Citi (C), Wells Fargo Earnings on Bloomberg TV

Wells Fargo (WFC) and Citigroup (C) reported earnings for the 2016 second quarter and Morningstar senior equity analyst Jim Sinegal joined Bloomberg TV's "Bloomberg Go" to discuss the results.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- Both Wells Fargo (WFC) - Get Report and Citigroup (C) reported earnings for the 2016 second quarter earlier Friday morning. Citigroup surpassed analyst expectations, while Wells Fargo matched estimates.

For the most recent quarter Citigroup posted earnings of $1.24 per share, above the $1.10 analysts had forecast. Revenue came in at $17.5 billion, matching expectations. Wells Fargo reported second quarter earnings of $1.01 per share on revenue of $22.16 billion, just missing the $22.17 billion Wall Street was expecting.

Morningstar senior equity analyst Jim Sinegal joined Bloomberg TV's "Bloomberg Go" this morning to discuss the banks' earnings and what investors were expecting.

"I think with respect to Citi, and JPMorgan (JPM) as well yesterday it's really a case of no news is good news. Investors were really worried about the effects of Brexit, you know the first quarter saw increases in credit losses due to falling oil and gas prices," Sinegal told Bloomberg TV anchor David Weston.

Sinegal noted that none of those thing were really an issue this past quarter for Citi and the rate environment hasn't been as big as a headwind as expected.

"We think management at Citi has done a great job cutting expenses now for a number of years," Sinegal said. "That continued this quarter. Nothing too big to worry about and a lot of positives within the quarter."

Moving on to Wells Fargo Weston pointed out that earnings were a "little disappointing" for the second quarter and looked to Sinegal to explain what happened.

"I think Wells Fargo is a little more interest rate sensitive," Sinegal said. "They placed a little bit bigger bet than some of the other banks on rising rates. The outlook there does not look as bright as it did...and long term rates are continuing to come down."

The analyst also pointed out the Wells Fargo did not grow loans this quarter.

Shares of Wells Fargo are down by 1.96% to $47.97 on Friday morning, while shares of Citigroup are gaining by 0.56% to $44.71.

(Wells Fargo is a part of Jim Cramer's charitable trust Action Alerts PLUS. See all of Cramer's holdings with a free trial here.

Loading ...