Summarizing the big bank data dump this morning, Bloomberg's Jenny Surane writes that "as usual, you see a bit of push and pull between banks’ divisions that cater to Main Street and those that focus on Wall Street."
And this quarter, she concludes "it seems as though Wall Street took the win. Again."
Goldman Sachs posted record profit, helped by a standout performance from its traders and dealmakers. The firm just a few months ago had expressed some real skepticism about the trend of blank-check firms going public. But that didn’t scare it away from the business, which helped boost equity underwriting revenue by more than 300%.
JPMorgan’s traders also had a strong quarter, with revenue climbing a whopping 25% (analysts were expecting volume and revenue to moderate across the industry). But those results were overshadowed by weak loan demand. In a conference call, JPMorgan’s top executives warned that consumers who received the most recent stimulus checks are simply setting aside the funds for savings or paying down debts rather than going out and spending it. The firm also warned that expenses will be slightly higher this year than it previously thought.
Wells Fargo doesn’t really have much of a Wall Street operation to lean on, so it’s got nowhere to hide from stubbornly low interest rates and tepid demand for loans. The firm’s net interest income dropped a whopping 22%, and CEO Charlie Scharf warned that low rates would continue to be a drag on earnings.