On Tuesday, Wells Fargo posted a lackluster earnings report that fell well behind many economists’ estimates even with COVID-19 factored in. Overall, the company reported a net loss of over $2.4 billion since first quarter’s report in April. That accounts to a 66 cent loss per share, shattering estimates that predicted just a 20 cent loss per share. Since last earnings, Wells Fargo’s stock has also fallen by over 20 percent.
JPMorgan Chase and Citigroup, two other major banks, released modest earnings reports on Tuesday falling much closer to expectations. While major banks in the country are in for a long haul over the next year or two due to COVID-19 restrictions, both Citigroup and JPMorgan posted net profits of over $1.3 billion and $4.7 billion, respectively – beating expectations.
Still, analysts are continuing to grow skeptical of these major banks, including Bank of America, which releases earnings on Wednesday. Loan-loss provisions for each of the three banks that reported earnings were widely more than many predicted, with JPMorgan and Wells Fargo posting an astounding $10.5 billion and $9.6 billion in provisions set aside to account for commitments that will be late or remain unpaid. Time will tell how banks will continue addressing plummeting loan and credit card payments, and whether the government will eventually need to get involved similar to the Great Recession.