Analysts expect big banks to record gains in second quarter profits following economic recoveries from the Covid-19 hit year 2020, according to WSJ.

banking industry loan-loss reserves
  • With banks such as JPMorgan and Goldman Sachs expected to report second quarter results on Tuesday, analysts expect a more than 40% jump in profits from the same period last year.
  • The projected earnings reflect a better economic outlook and moves by banks to release reserves that could boost profits. 
  • Analysts expect second quarter earnings to be weighed down by slowdowns in trading profits which blossomed during the pandemic.
  • Low interest rates and depressed loan demand is also expected to dampen bank profits, with net-interest margin already at historic lows in the first quarter.

Companies are said to be hoarding about $17 trillion in deposits in US banks, up almost 30% or $3.8 trillion since the beginning of the pandemic that could drag lending earnings.

JPM: NYSE is down -1.17% on pre-market, GS: NYSE is down -0.13% on pre-market, MS: NYSE is up +0.16% on premarket.