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Macro Takeaways From Bank Earnings So Far:

EQUITIES

JP Morgan:

  • Average loans up 17%, while average deposits down 4%.
  • Consumers and businesses "generally remain healthy", although, consumers are spending down their excess cash buffers. […] "This may be the most dangerous time the world has seen in decades."
  • Home Lending net revenue was up 36% overall, but down 2% when excluding acquisition of First Republic. The decline was driven by lower net interest income largely due to tighter loan spreads.

Wells Fargo:

  • Average loans down $2.3bln on the year driven by lower auto loans, residential mortgages and commercial real estate loans. Partially offset by higher credit card loans and commercial & industrial loans.
  • Average deposits down 5%, with allowance for credit losses for loans up $1.8bln to $15.1bln. Deposit drop reflects consumer deposit outflows on consumer spending as well as customer migration to “higher yielding alternatives”.
  • Allowance for credit losses for loans primarily for commercial real estate office loans, as well as higher credit card loan balances.
  • Home lending down 14% on the year due to lower originations, lower servicing income.

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