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Bank Earnings: Three Things to Know on Citi, JPM, Bank of America

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The big banks are kicking off earnings season, and while Citi (C) - Get Citigroup Inc. Report did so with a bang there are some particular factors to watch for in the rest of the earnings reports. 


Citi beat analyst's estimates on revenue and earnings per share, posting $18.8 billion and $1.95 respectively. This beat expectations of $18.5 billion and $1.80. This brought the rest of the banking group up slightly in premarket trading Monday, with the SPDR S&P bank ETF (KRE) - Get SPDR S&P Regional Banking ETF Report up 0.11%. 

Net Interest Margin

As interest rates on treasury bonds have fallen in 2019, net interest margins -- the interest on loans that a bank earnings earns over the interest it pays to lenders and depositors -- could fall. In time, falling rates may bring higher loan volumes, but the immediate impact is a contraction in the margin. 

Perhaps of equal importance is for investors to look for banks with a highly diversified business. JPMorgan (JPM) - Get JP Morgan Chase & Co. Report reports earnings before the market opens Tuesday, July 16. JPM is especially known for being well diversified, allowing it to grow even when its core business of lending is suffering. 

Bank of America

Bank of America (BAC) - Get Bank of America Corporation Report reports earnings Wednesday, July 17, before the market opens. The bank is looking to cut costs like Citigroup, and investors should watch the earnings to see if Bank of America was able to execute on the full extent of the cost cutting program. 

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