Major US banks post solid third quarter loan growth, but see more competition for deposits

Live updates

1. 46m ago

   Major US Banks Report Solid Q3 Loan Growth Amid Deposit Competition

   JPMorgan Chase, Citigroup, and Wells Fargo reported increased net interest income and solid loan and deposit growth for the third quarter. Citigroup saw average loans jump 12% and deposits rise 11%, while Wells Fargo recorded an 11% increase in average loans and a 10.7% rise in deposits. JPMorgan reported a 4% increase in average deposits and a 2% rise in loans. Despite these gains, lenders are paying premiums to retain customer funds as record US Treasury yields drive clients toward higher-yielding alternatives.

   Why it matters

   High interest rates typically create a tension between increased lending revenue and the rising cost of maintaining deposits. These results show that major lenders are currently defying fears that borrowing costs would stifle loan demand. However, the shift of funds toward Treasury yields indicates mounting funding pressures for the banking sector.

   What is confirmed

   • JPMorgan Chase, Citigroup, and Wells Fargo all reported higher net interest incomes.
   • Citigroup reported a 12% jump in average loans and an 11% increase in average deposits.
   • Wells Fargo reported an 11% jump in average loans and a 10.7% rise in average deposits.
   • JPMorgan reported a 4% rise in average deposits and a 2% increase in loans compared to a year ago.
   • Lenders are paying a premium to retain customer funds due to a competitive, high-interest-rate environment.

   Still unconfirmed

   • Higher interest rates have taken a bite out of JPMorgan's profits.
   • Rising interest rates threaten to spoil the party for big banks.
   • Market jitters have caused deals to slow, though the pipeline remains strong.

   What to watch next

   • Further Q3 earnings reports from other major Wall Street firms.
   • Changes in US Treasury yields affecting deposit retention.
   • Updates on consumer sentiment and its impact on loan demand.
   Sources used for this update (12)

   1. The New York Times — Higher Interest Rates Take Bite Out of JPMorgan’s Profits
   2. WSJ — Rising Interest Rates Threaten to Spoil the Party for Big Banks
   3. Financial Times — Wall Street plays down investor fears of faltering trading boom
   4. Reuters — Wall Street banks see deals slow on market jitters but pipeline is strong
   5. Yahoo Finance — Major US banks post solid third quarter loan growth, but see more competition for deposits
   6. Barron's — Bank Earnings: JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup to Report Third-Quarter Results
   7. WSJ — Wall Street Books Profits But Loses Some Momentum in Q3
   8. Investopedia — What Big Bank CEOs Are Saying About The Economy
   9. finance.yahoo.com — US banks post solid third-quarter loan growth, but face more ...
   10. www.kitco.com — Major US banks post solid third quarter loan growth, but see ...
   11. www.manilatimes.net — Major US banks post solid Q3 loan growth - The Manila Times
   12. squawknews.com — Major US banks post solid third quarter loan growth… - SquawkNews
   confidence 95%