Show an ad over header. AMP

What bank's booming profits say about the economy

Some of America's biggest banks are making more money now than they were before the pandemic hit.

Why it matters: Quarterly earnings out this week hint that the worst economic scenarios haven't yet come to pass. Still, executives are warning there could be a rocky road ahead for the economy.


  • These banks are the biggest lenders in the country and have insight into the financial health of millions of Americans and businesses. So analysts often parse these quarterly results for indicators of how the economy is doing.

What they're saying: "The consumer is in reasonably good shape for whatever we may face next," Jennifer Piepszak, JPMorgan's chief financial officer, said during a call with Wall Street analysts this week.

  • "Having said that, there is a significant amount of uncertainty about what we may face next."

By the numbers: JPMorgan reported $9.4 billion in profits — 4% more than it made this time last year.

  • Goldman Sachs, which has way less exposure on the lending front, made $3.6 billion, nearly double what it made in the same quarter a year ago.
  • And while Wells Fargo and Citigroup saw a drop-off, they're both still profitable. Citi made $3.2 billion, while Wells Fargo raked in $1.7 billion.

What's going on: Banks were buoyed by strength in the Wall Street-facing divisions: including the parts of the company that, for instance, are focused on trading or help take companies public.

  • Also helping results: There haven't been widespread loan defaults, despite millions of Americans being out of work and scores of businesses operating at reduced capacity.
  • JPMorgan, for example, reported $1.2 billion in net charge-offs — or loans it doesn't expect payment on — which is less than it reported this time last year.

The state of play: Last quarter, the biggest banks set aside a whopping $24 billion to cover potential bad loans. This quarter banks added to those reserves, though at a slower pace — a sign that executives are still preparing for defaults down the line.

  • Bank of America released some of the money set it previously set aside for consumer loan losses, noting an improving economy.
  • The bank's CEO, Brian Moynihan, said on Wednesday Bank of America is seeing a return to "a generally sound underlying economy ... [b]ut we won’t get there until we have fully addressed the health care crisis and its associated effects."

Between the lines: The banks would have raked in even more money, were they not dealing with the aftermath of a slew of scandals.

  • Wells Fargo took a nearly $1 billion hit inexpenses related to the fallout of its fake account scandal.
  • Citi had higher expenses thanks to a fine from a regulator in response to management failures.
  • JPMorgan also took a charge to help cover a $920 million fine for rigging commodity markets between 2008 and 2016.

The bottom line: Executives largely attribute the strength to stimulus measures — and they're calling for another package to help shore up consumers.

  • Another stimulus package "will create more buffer to take us through hopefully the other side of the tunnel, without too much pain and destruction to bank balance sheets," with loan defaults, Mark Doctoroff, a bank analyst at MUFG, tells Axios.

Post-debate poll finds Biden strong on every major issue

This is one of the bigger signs of trouble for President Trump that we've seen in a poll: Of the final debate's seven topics, Joe Biden won or tied on all seven when viewers in a massive Axios-SurveyMonkey sample were asked who they trusted more to handle the issue.

Why it matters: In a time of unprecedented colliding crises for the nation, the polling considered Biden to be vastly more competent.

Keep reading... Show less

The murder hornets are here

Entomologists in Washington state on Thursday discovered the first Asian giant hornet nest in the U.S.

Why it matters: You may know this insect species by its nom de guerre: "the murder hornet." While the threat they pose to humans has been overstated, the invading hornets could decimate local honeybee populations if they establish themselves.

Keep reading... Show less

Biden is highest-spending political candidate on TV ads

After spending an additional $45.2 million on political ads this week, former Vice President Joe Biden has become the highest-spending political candidate on TV ads ever, according to data from Advertising Analytics.

By the numbers: In total, the Biden campaign has spent $582.7 million on TV ads between 2019 and 2020, officially surpassing Michael Bloomberg's record spend of roughly $582 million. Biden's spend includes his primary and general election advertising.

Keep reading... Show less

SurveyMonkey poll: Trump improves, but not enough

President Trump's final debate performance exceeded Americans' expectations, but it wasn't enough to shift the dynamics that left him trailing Joe Biden across most measures, according to a new Axios-SurveyMonkey poll.

What they're saying: "Liar" was the word used most by debate watchers to describe Trump's performance, followed by "lies," "strong," "presidential" and "childish." "Presidential" was the word used most to describe Biden's performance, followed by "liar," "weak," "expected" and "honest."

Keep reading... Show less

Hunter Biden saga dominates online debate

Data: NewsWhip; Table: Axios Visuals

The mainstream media turned away. But online, President Trump's charges about Hunter Biden were by far the dominant storyline about the final presidential debate, according to exclusive NewsWhip data provided to Axios.

  • Coverage of business dealings by Joe Biden's son — and pre-debate allegations by one of his former business associates, Tony Bobulinski — garnered more than twice as much online activity (likes, comments, shares) as the runner-up.
Keep reading... Show less

America was sick well before it ever got COVID-19

From high levels of obesity and opioid addiction to inequities in access to care, America's pre-existing conditionsmake the country an easy target for COVID-19, as well as future pandemics that could cripple the United States for decades to come.

Why it matters: One of the best ways the country could prepare for future threats — and boost its economy — is to improve Americans' overall health.

Keep reading... Show less

Fauci says if people won't wear masks, maybe it should be mandated

NIAID director Anthony Fauci told CNN on Friday evening that if "people are not wearing masks, then maybe we should be mandating it."

Why it matters: Fauci made the comments the same day the U.S. hit its highest daily COVID-19 case count since the pandemic began.

Keep reading... Show less

Harris to Black voters: Casting a ballot is about honoring your ancestors

Sen. Kamala Harris appealed to Black voters in Georgia on Friday, urging them to "honor the ancestors" by casting ballots, and again calling President Trump a "racist."

Why it matters: The U.S. saw a significant decline in African-American voter turnout between 2012 and 2016, reaching its lowest point since 2000. Higher turnout among Black Americans this year could tip the balance in favor of Democrats in key battleground states, including Georgia.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories