Bank Books Brighten But Q4 Seen Tough As JP Morgan, Citigroup, Wells Fargo To Report Earnings

bank books brighten but q4 seen tough as jp morgan citigroup wells fargo to report earnings

Key Takeaways:

Q4 was likely a tough one for biggest banks, but rising yields might have helped Credit loss reserves in sharp focus ahead of earnings for signs of bank sentiment New administration, Congress in D.C. could have implications for regulatory burden

The headwinds blowing steadily at big banks for almost a year are relenting a little, just in time for earnings season.

As we approach Friday’s Q4 earnings reports from JP Morgan Chase JPM (JPM), Citigroup C (C) and Wells Fargo (WFC WFC ), the lethal combination of ultra-low interest rates, credit worries, a steep economic slowdown and tough government regulations that held bank performance in a tight grip for most of 2020 isn’t entirely gone, but could be loosening.

One sign came last month when the Fed lifted some restrictions on share buybacks for banks, thanks in part to their strong performances in recent stress tests. This reinforced what appears to be the relative health of the industry after last year when big banks had to set aside huge amounts of money to offset possible credit losses.

Some banks responded quickly to the Fed’s announcement by announcing fresh share repurchase programs, helping inject new life into the sagging sector. At the same time, Treasury yields moved …

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