JPMorgan Chase was the big winner in Q1 JPMorgan Chase was the big winner in Q1 JPMorgan Chase was the big winner in Q1

JPMorgan Chase was the big winner in Q1

Peter Garnry

Head of Equity Strategy

Summary:  The three major US banks JPMorgan Chase, Wells Fargo, and Citigroup have reported Q1 earnings all showing strong growth in net interest income and higher than estimated earnings. From a relative perspective it is clear from the deposit figures and provisions from credit losses that JPMorgan Chase was the big winner and the market reaction today is reflecting this. While the three banks are all mentioning that they have not tightened their credit conditions, Well Fargo says that consumer spending has softened in late Q1.

Net interest income growth pulls earnings higher

US equities are unchanged today but financials are up 1.2% driven by the banks industry group up 3.2% driven by better than expected results from JPMorgan Chase, Wells Fargo, and Citigroup.

JPMorgan Q1 earnings:

  • Adjusted revenue of $39.3bn vs est. $36.8bn – driven by higher net interest income
  • EPS $4.10 vs est. $3.38
  • ROE 18% vs est. 15.2% - outstanding return on capital
  • Provision for credit losses $2.28bn vs est. $2.31bn – no adverse developments in credit
  • Deposits of $2.38trn vs est. $2.33trn – sign that there has been an excess shift of deposits into larger banks
  • Sees a slight deterioration in economic outlook
  • CFO says “deposits in the financial system are shrinking because of the Fed’s quantitative tightening”

Wells Fargo Q1 earnings:

  • Revenue $20.7bn vs est. $20bn – driven by higher net interest income
  • EPS $1.23 vs est. $1.13
  • Deposits a bit below estimates suggesting Wells Fargo gained less deposits than JPMorgan during recent banking deposit turmoil
  • Has not changed its credit risk appetite
  • Deposit costs are climbing – this is due to investors moving into money market funds and other banks are competing for deposits
  • Provisions for credit losses $1.21bn vs est. $919mn – this suggests that economic conditions are worsening relative to estimates on the US west coast when we compare this figure with JPMorgan Chase
  • Sees consumer spending still strong but beginning to soften in late Q1 – this was also confirmed in today’s US March retail sales figures disappointing against estimates

Citigroup Q1 earnings:

  • Revenue $21.5bn vs est. $19.9bn
  • Adjusted EPS $1.86 vs est. $1.65
  • Deposits below estimates – again suggesting that Citigroup benefitted less than JPMorgan Chase from the banking turmoil
  • CEO Fraser says that current environment is not ideal for wealth management

Judging from the market reaction JPMorgan Chase was the biggest winner in Q1 by the big banks while Wells Fargo clearly was the biggest relative loser.

Tighter credit conditions or not?

An interesting comment from JPMorgan during the conference call was that the bank it not tightening credit yet, but the Conference Board US Leading Credit Index suggests that credit conditions are indeed higher than observed in most months since the Great Financial Crisis. While JPMorgan may not be tightening credit standards yet but the CEO Jamie Dimon said that people need to be prepared for higher rates for longer which will add to tighter credit conditions over time. Dimon also said on the call that the banks that could get into trouble could be counted on one hand and that many regional banks have sticky mid-market deposits. Next week we get the first test of Q1 earnings from US non-large financial institutions such as US Bancorp and Charles Schwab.


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.