| 2019-07-12 15:07:25|
C, JPM… 15:07 07/12 07/12/19
Fly Intel: What to watch in first round of big bank earnings reports
Citigroup (C) is scheduled to report quarterly results before the open on July 15, while JPMorgan (JPM) and Wells Fargo (WFC) are expected to report on July 16. What to watch for: 1. OUTLOOKS: During the company's last earnings call, JPMorgan said it sees fiscal year 2019 NII $58B-plus, market dependent, fiscal year 2019 adjusted expense to be less than $66B and 2019 net charge-offs less than $5.5B. Meanwhile, Wells Fargo CFO John Shrewsberry said that if deposit repricing continues to be slower than expected but has an upward trajectory, the net interest income could be closer to the high-end of the guidance range of down 2%-5%. Wells Fargo management said the company is on track to meet expense guidance of $52M-$53M and is set to hire 1,300 people with a focus on compliance. The company is also "redoubling" its efforts to satisfy regulators. 2. DIVIDEND INCREASE, SHARE REPURCHASE: Late last month, JPMorgan announced that the Federal Reserve Board did not object to the bank's capital plan under the recently concluded 2019 comprehensive Capital Analysis and Review. JPMorgan Chase's Board of Directors intends to increase the quarterly common stock dividend to 90c per share, up from the current 80c per share, effective the third quarter, and has authorized gross common equity repurchases of up to $29.4B between July 1, 2019 and June 30, 2020 under a new common equity repurchase program. Meanwhile, Wells Fargo expects to increase its third quarter 2019 common stock dividend to 51c per share from 45c per share, and its planning common stock repurchases of up to $23.1B for the four-quarter period. Additionally, Citi said its quarterly common stock dividend will increase from 45c to 51c per share, subject to quarterly approval by Citi's Board of Directors. The bank also announced a common stock repurchase program of up to $17.1B during the four quarters starting in the third quarter. 3. BLOCKCHAIN: JPMorgan and Microsoft (MSFT) announced back in May they signed a memorandum of understanding to form a strategic partnership to accelerate the adoption of enterprise blockchain. Through this partnership, Quorum, developed by JPMorgan, will become the first distributed ledger platform available through Azure Blockchain Service, enabling JPMorgan and Microsoft customers to build and scale blockchain networks in the cloud. 4. HEALTHCARE JV: Haven, the health joint venture formed last year by Amazon (AMZN), Berkshire Hathaway (BRK.A) and JPMorgan, has lost COO Jack Stoddard just nine months into his new role, CNBC's Christina Farr reported in May. Stoddard confirmed his departure to CNBC, saying he left the company for personal reasons. 5. LEGAL COSTS: Wells Fargo said in a regulatory filing that the high end of the range of reasonably possible potential losses in excess of the company's accrual for probable and estimable losses was approximately $3.1B as of March 31, 2019. The increase in the high end of the range from December 31, 2018, was due to a variety of matters, Wells said. Additionally, the bank said in the filing that it is reviewing disclosures made to debit card customers, and that it may have to refund some debit card fees.
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