Banking stocks including Goldman Sachs, Charles Schwab, and M&T Bank were rising Monday following the firms’ first-quarter earnings reports.
JPMorgan Chase, Citi, and Wells Fargo all reported earnings Friday that exceed Wall Street’s expectations, but their stocks still feel as they warned of geopolitical, economic, and regulatory challenges.
Morgan Stanley, Bank of America, and BNY Mellon are set to release earnings reports on Tuesday.
Goldman Sachs beats expectations
Investment banking giant Goldman Sachs released its first quarter earnings report Monday morning, beating Wall Street expectations. The stock was up about 3.5% to near midday.
Goldman Sachs reported earnings of $11.58 per share, compared to expected earnings of $8.54 per share. The company’s revenue increased by 16% to $14.21 billion, exceeding the expected revenue of $12.92 billion.
CEO David Solomon said Monday that artificial intelligence could be a new gold mine for investment bank.
While there is a “broad consensus about the transforming potential of AI,” Goldman is already seeing an “enormous appetite” from clients for advising and supporting AI strategies and the potential for continuing work in the field, Solomon said.
Charles Schwab meets expectations
The financial services company Charles Schwab reported 74 cents in earnings per share in its first quarter, slightly exceeding expectations of 73 cents. The company’s revenue of $4.7 billion for the quarter was in line with analysts’ expectations of $4.71 billion. Charles Schwab total client assets reached a record $9.1 trillion, up by 20% from the same period last year.
Charles Schwab rose 4% near midday to hit a new 52-week high.
M&T misses expectations — but the stock still rises
M&T Bank also released its quarterly earnings report on Monday, and it didn’t meet expectations. But the stock was nevertheless the top performer in the S&P 500 near midday, rising 5.7%.
In its first-quarter earnings report, the bank’s profit dropped by 25% due to higher deposit costs reducing its interest income. Earnings per share were $3.02, much lower than the $4.01 recorded a year ago. Net interest income dropped to $1.68 billion from $1.82 billion last year.
The stock still rose fallowing an optimistic outlook for future quarters.
“We are off to a solid start in 2024 as we were able to grow certain sectors of our commercial and consumer loan portfolios, while continuing to shrink our commercial real estate exposure,” CFO Daryl N.Bible in the bank’s earnings release.
“M&T’s liquidity and capital position strengthened, reflecting a stable deposit base, higher levels of borrowings and solid earnings after considering seasonal employee compensation expenses and an incremental FDIC special assessment,” he added.