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US banks double their profits with the economic recovery

US banks double their profits with the economic recovery

Bank of America, Citigroup, and Wells Fargo, three of the largest banks in the United States, Its profits doubled in the first half of 2021 thanks to the country’s economic recovery, which allowed them to release important reserves they had accumulated to face problems during the coronavirus crisis.

The three entities released quarterly accounts on Wednesday that were marked by a sharp rise in profits, in line with what rivals JPMorgan Chase and Goldman Sachs showed the day before.

Despite the sharp rise in profits, both Bank of America and Citigroup saw their sales decline in the second quarter Of the year, because of low interest rates and low income from their loan business.

Income is less than expected by analysts, disappointed Wall Street and shares of both entities fell at this time, especially Bank of America shares, which left about 4.50 percent an hour after the opening.

The second bank in the country after JPMorgan earned $17,274 million between January and June مليونUp 129 percent from the same period the previous year, but its turnover remained at $44,287 million, below the $45,093 million it had entered the previous year.

In the second chapter, American bank made a net profit of $1,244 million, Compared to 3,533 million dollars a year ago, when it had allocated large sums before the outbreak of the epidemic.

And the bank accounts benefited from the release of 200,000 million he had kept to protect himself from possible Defaulting during a crisis.

Consumer spending has significantly exceeded pre-pandemic levels, Strong deposit growth Lending levels are beginning to grow, Chairman and CEO Brian Moynihan said in a statement.

The release of these reserves boosts the results of large US banks, which no longer see the need for so many reserves given the good progress of the country’s economic recovery.

“The pace of the global recovery has exceeded previous expectations and with it consumer and business confidence,” Citigroup CEO Jane Fraser defended in a statement.

His company, which already released $2 billion in reserves in the first quarter of this year, added another $1 billion between April and June.

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Citigroup closed the first half with a net profit of 14 thousand and 135 million dollars, Almost 300 percent more than in the same period in 2020.

Like Bank of America, Citigroup also saw its revenue decline in the first half of the year, when its turnover came to $36.8 billion, down 9 percent.

Citigroup’s profits in the second quarter amounted to 17,474 million dollars (12 percent less than that period in 2020), but its profits jumped to 6.193 million, compared to just over a billion a year ago, when it set aside more than $8 billion to cover potential losses due to the pandemic.

for his part Wells Fargowhich lost $2.930 billion in the first half of 2020, In the first half of this year, he received 10 thousand and 676 million dollarsAnd, unlike other entities, its sales increased 6 percent to $38,802 million.

San Francisco-based company, the fourth largest bank in America. In terms of the size of assets, it has a somewhat different business from its competitors, without large investment banking operations, moreover, It is subject to regulatory restrictions after the scandal of creating fake accounts.

Wells Fargo reported net profit of $6.04 billion in the second quarter, with sales of $20.27 billion, up 11 percent and clearly above analyst expectations.

This week’s financial sector accounts open the wave of corporate results in the US, as markets expect to see signs of a recovery in activity in recent months.