The six biggest U.S. banks, including JPMorgan Chase (JPM) - Get JPMorgan Chase & Co. (JPM) Report and Wells Fargo (WFC) - Get Wells Fargo & Company Report, are scheduled to report second-quarter earnings next month, and the results aren’t expected to be pretty.
The six behemoths will produce a combined revenue decline of about 5% in the quarter compared with a year earlier, analysts surveyed by Bloomberg estimate.
The No. 1 problem will be trading revenue, which analysts estimate dropped 28% in the quarter for the top investment banks, Bloomberg reports.
Loans aren’t exactly booming either, with the commercial banks facing a 3% decline in total loans for the quarter, analysts predict.
To be sure, the banks' revenue from mergers and acquisitions surged 30% surge in the quarter, analysts forecast. They are expected to release more reserves as well.
JPMorgan recently traded at $154.34, up 2.3%; Wells Fargo at $43.37, up 2.5%; Citigroup (C) - Get Citigroup Inc. Report at $68.35, up 2.4%; Bank of America (BAC) - Get Bank of America Corp Report at $39.78, up 2.6%; Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report at $368.17, up 2.6%; and Morgan Stanley (MS) - Get Morgan Stanley (MS) Report at $89.77, up 2.4%.
In other big-bank news, Wells Fargo said Thursday that it would stop offering personal lines of credit and shutter those current accounts.
The bank will no longer offer the product, which enabled users to borrow between $3,000 and $100,000 and was pitched as a tool to consolidate higher-interest credit-card debt, pay for home renovations and avoid overdraft fees on linked accounts.
Customers have received 60 days’ notice that their accounts will be shuttered, and remaining balances will require regular minimum payments, CNBC reported.
The move is part of Chief Executive Charles Scharf's reimagining of the San Francisco company.