Jeremy Hobson: We’ve got earnings this hour from the first of the major Wall Street banks to report. That would be JP Morgan Chase, which said this morning that it made $4.3 billion in profit last quarter. That’s down compared to the same
period last year thanks to a drop in investment banking, which is not surprising given the slowdown in corporate deal-making.
But as Marketplace’s Alisa Roth reports, JP Morgan isn’t necessarily representative of the whole banking sector.
Alisa Roth: It’s easy to lump ‘banks’ together as one big industry. But an institution like JP Morgan is completely different from a place like U.S. Bancorp., or even Goldman Sachs.
Chris Whalen is a banking industry analyst.
Chris Whalen: It’s like a coral reef. We have a lot of different kinds of fish and you have to always approach them that way as an analyst.
And he says depending which species you’re looking at, you’ll get a very different answer about the state of the industry.
Whalen: The regionals are getting better. The big guys are not. The big guys are still suffering from a lot of legacy issues, so you have to think of them differently.
Those legacy issues are things like bad mortgages. But even within the big banks, the picture can vary: Bank of America and Wells Fargo still have a lot of mortgage risk. Citibank, on the other hand, has cleaned up its housing mess. But it still has high loss rates. We’ll continue to get bank earnings through next week.
In New York, I’m Alisa Roth for Marketplace.