Financial analysts are putting their forecast bets on the table ahead of Friday, 12 January, when the four top US banks will publish their 2023 financials. Although the past year was a tough economic one for most banks, analysts believe JPMorgan Chase & Co. (JPM) will report yearly profits of approximately $49bn, which will be a first for the industry.
Forecasters predicting a strong annual performance for JPMorgan
Bolstered by its acquisition of First Republic and better loan margins, predictions are that JPMorgan’s year-on-year bottom line will be 30% more. This means that the bank will outperform competitor Bank of America (BAC) by more than $20bn. Should these Bloomberg predictions be on target, JPMorgan will also more than double the annual net profits of Wells Fargo (WFC) and more than quadruple those of Citigroup (C).
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This bank closed its Tuesday trading at $170.66 per share and recorded an all-time high of $172.27 on 5 January. Yahoo Finance quoted Wells Fargo analyst, Mike Mayo, who summed the scenario up as:
Goliath is winning and they are the Goliath of Goliaths.
Experts warn, however, that no bank can escape the prevailing economic challenges, and JPMorgan will be hard-pressed to sustain this financial stamina throughout 2024. Those in the know predict a poorer fourth quarter compared to 2022 and that profits may plunge to roughly $45bn during this year.
Some of the possible obstacles include renewed strain on loan margins, increasing loan derelictions, and more intense financial regulations. Another worrying factor is the decreased interest rates on loans in anticipation of Federal Reserve rate cuts. The proof is however in the pudding and will only be certain on Friday.
