Shares in several major banks tumbled on Friday – even after reporting solid quarterly earnings – as reports underwhelmed investors and some firms warned of rising spending and “inflationary pressures” that could impact future earnings.
Shares of JPMorgan Chase, the largest US bank by assets, fell nearly 6% on Friday despite beating earnings and revenue estimates.
It was the bank’s smallest earnings decline in the past seven quarters, and JPMorgan’s CFO lowered its forecast for company-wide earnings, citing “headwinds,” including “inflationary pressures.”
Citigroup’s stock also tumbled over 2% after reporting solid sales and earnings numbers, as investors were particularly alarmed by the bank’s sharp drop in earnings.
The company’s net income fell 26% in the fourth quarter, with Citigroup blaming rising expenses for the sharp decline.
The only major bank to report earnings on Friday and bucking the trend was Wells Fargo, whose shares rose nearly 3% on better-than-expected earnings and a big jump in earnings.
Wells Fargo, the fourth-largest US bank by assets, said lending is picking up again, adding that the latest quarterly results were boosted by an $875 million reserve release that had been set aside to protect against loan losses.