NEW YORK–The nation’s biggest banks are reporting some of their biggest profits, even as the data shows a slowdown in ending.
JPMorgan Chase reported a quarterly profit of $8.3 billion for the second quarter, an increase of 18% from a year ago and close to the record $8.7-billion in profit it reported during Q1 of this year.
Also reporting strong earnings: Citigroup and PNC, while Wells Fargo, which is operating under regulatory constraints following a series of illegal actions, said its profits were down.
According to federal bank data compiled by The New York Times, lending at the four banks grew only 2.1% in the second quarter from a year earlier, a slowdown from the 3% rise in the first quarter.
The Times’ analysis suggested tax cuts have increased cash flows at companies, perhaps reducing the near-term demand for loans, and that higher interest rates may also be deterring borrowers. “And banks may be holding back because they don’t want to extend loans that have a higher chance of defaulting,” the Times said.
Shareholders in the big four banks will all be seeing more cash, with the banks saying they plan to distribute nearly $90 billion to shareholders.
Loan Demand is ‘Decent’
“As we sit here right now today, I would characterize demand as being solid, as being decent — it’s not what it was two years ago,” JPMorgan Chase’s chief financial officer, Marianne Lake, said on a conference call with journalists, the Times reported.
JPMorgan, the nation’s largest bank, had the fastest loan growth among the four banks. JPMorgan’s total loans grew by 4.4%.
Wells Fargo’s loans declined by 1.4% in the second quarter. The bank’s CFO said federal caps on its growth have not been a “constraint,” and instead Wells Fargo’s loans to buyers of commercial properties, like office buildings and shopping malls, declined by $2.5 billion in the second quarter from earlier this year.