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Business

US banks manage to convince investors

October 14, 2016

Three of the biggest lenders in the US have presented their third-quarter results - and they are better than analysts had expected. The positive news came as one of the banks faced huge fines for opening sham accounts.

https://p.dw.com/p/2RErL
Wells Fargo Bank in New York
Image: picture-alliance/dpa/J. Szenes

At Wells Fargo, where CEO John Stumpf resigned Wednesday over the bank having created millions of bogus accounts to boost growth figures, net profit came in at $5.6 billion (5.1 billion euros) in the third quarter. While this was 2.6 percent down from the same period a year earlier, the result was a lot better than expected by analysts.

Wells Fargo reiterated Friday it was planning several steps to restore consumer trust after paying about $190 million in fines over its sham accounts scandal.

The lender's new CEO, Tim Sloan, admitted, though, that winning back trust would require a lot of time and persistent work.

Calm waters

Citigroup reported an 11-percent drop in bottom-line earnings for the third quarter year on year, but its results also beat Wall Street expectations. The New York-based lender logged net income of $3.8 billion, while revenue fell by 5 percent to $17.76 billion.

Wells Fargo CEO John Stumpf resigns effective immediately

Market leader JP Morgan was ale to boost its third-quarter operating profit by almost a third as the bank profited form higher interest rates and cost-cutting measures. But net earnings dropped by almost 8 percent to $6.29 billion year on year.

The bank pointed out that results were somewhat distorted, because the lender received a one-off hefty tax return in the same quarter last year.

The country's second-largest lender, Bank of America, is due to present its third-quarter results on October 17.

hg/jd (Reuters, dpa)