Five of the largest banks in the US including JP Morgan Chase, Bank of America, Wells Fargo, Morgan Stanley, and Citigroup have reported record second-quarter results, with combined market cap reaching $1.4 trillion, despite predicted pandemic loan losses.
According to data from BuyShares, US banks have outperformed analysts’ estimates thanks to consumer spending, with some sectors increasing even beyond pre-Covid-19 levels. Credit quality has also improved, while savings and investments have risen. A national vaccination roll-out has also allowed Americans to go back to work and spend more.
The factors have boosted banks’ profitability, leading to high stock prices. According to YCharts data, the market cap of JP Morgan Chase, the largest bank in the US jumped by $205 billion in the last year.
In addition, statistics show that JP Morgan Chase’s market cap hit nearly $500 billion which is a 70% increase compared to January figures.
Bank of America, the second-largest bank by market cap also saw growth. In the last twelve months the combined value shares of the investment bank reached $153.8 billion, reaching $362.6 billion last week.
Wells Fargo’s stock price growth double in the same period. In September 2020, the combined value of shares stood at $97.2 billion. Statistics show this figure increased by 98% and hit $193 billion last week.
Meanwhile Morgan Stanley saw the biggest stock price growth last year. In September 2020, the combined value of shares of the New York-based financial services corporation stood at $74.5bn. By the end of the year, this figure increased by 55% to $115.7 billion.
Citigroup witnessed a 54% market cap growth, the smallest among the top five US banks. Between January and October, the combined value of shares of the US banks jumped by $51 billion or 54% reaching $144.3 billion last week.
The market cap bounce back is a monumental change from last year. US banks were punished by investors during the pandemic in after they recorded the biggest drops in market capitalization between January and August 2020, JPMorgan Chase, Wells Fargo, Bank of America saw their market capitalizations drop by a combined $353 billion in the first eight months of 2020.
- Weak loan demand, low net interest margins, and cyber threats continue to harm banks, according to the OCC
- CFPB Criticizes Smaller Banks for ‘Dependency’ on Overdraft Fees
- Agility ‘critical’ to remaining profitable, Syntellis report finds
- ABA-led coalition calls for roadmap for FHA-insured mortgage products post-Libor
- City National Bank Chairman Retires; Heartland Bank Names Market President