The big US banks are releasing their 2024 full year results, and it is looking largely positive. Does this mean we are finally out the dismal days? Is the US set to have a bumper year?
At first glance, it all looks positive. Revenues are up across the board for wealth divisions in Us banks in 2024. Strategies are aligning and statements are sounding excited for the year ahead.
Go deeper with GlobalData
Matt Britzman, senior equity analyst at HL, examined: “US banks kicked off the latest earnings season on the front foot, beating expectations left, right, and centre despite a mixed economic backdrop. The sector delivered some giant profit gains, benefiting from rising interest income and strong performances in investment banking and wealth management. Loan growth remained stable, and provisions for credit losses moderated, indicating cautious optimism about credit quality.
“Investment banking and asset management were bright spots, reflecting a resurgence in deal activity and client engagement. At the same time, net interest margins saw some pressure in competitive lending areas, but this was largely offset by higher fee income and disciplined cost management. There’s a good read across for UK banks too, especially the likes of Barclays where investors will be hoping to see its large investment banking arm deliver similar performance to its US peers.”
So what were the results for the big Us banks in 2024?
Goldman Sachs
Net revenue for the asset & wealth management arm of Goldman Sachs in 2024 was $16.14bn, 16% up on 2023.
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By GlobalDataThis was attributed to higher net revenues in equity investments and higher management fees.
Also, net revenues in private banking and lending and incentive fees were higher. It was even a record year for private banking and lending net revenues.
The increase in equity investments net revenues primarily reflected significantly higher net gains from investments in private equities (largely reflecting the impact of net losses in real estate investments in the prior year), but the increase in management and other fees primarily reflected the impact of higher average assets under supervision.
In addition, assets under supervision increased 12% in the year to reach a record $3.14trn.
David Solomon, chairman and CEO of Goldman Sachs, said: “We are very pleased with our strong results for the quarter and the year. I’m encouraged that we have met or exceeded almost all of the targets we set in our strategy to grow the firm five years ago, and as a result, have both grown our revenues by nearly 50% and enhanced the durability of our franchise. With an improving operating backdrop and growing CEO confidence, we are harnessing the power of One Goldman Sachs to continue to serve our clients with excellence and create further value for our shareholders.”
Wells Fargo
Revenue for Q4 2024 in the wealth and investment management arm of Wells Fargo totalled $3,958m, an 8% increase year-on-year.
Of that, $508m was income, only a 3% rise from Q4 2023.
Net interest income was down 6% driven by higher deposit costs including the impact of increased pricing on sweep deposits in advisory brokerage accounts, partially offset by higher deposit balances.
Chief Executive Officer Charlie Scharf said: ““I’m excited about the opportunities ahead as we’ve seen improved results and increased market share in many of the businesses that we believe will drive higher growth and returns over time. For example, our credit card business continues to generate strong growth while maintaining a strong credit profile. After several years of minimal growth, we grew net checking accounts more meaningfully in 2024. We also grew mobile active customers by 1.5 million in 2024. For our affluent clients, we are starting to see some early benefits from the enhancements we have been making to our Wells Fargo Premier offerings, including higher deposit and investment balances. Fees and market share from investment banking and trading activities have been growing and our revenues in both trading and investment banking grew by double-digits in 2024, reflecting the investments we have been making in talent and technology.
“I believe we are still in the early stages of seeing the benefits of the momentum we are building, and our financial performance should continue to benefit from the work we are doing to transform the company. I want to thank everyone who works at Wells Fargo for their hard work over the past year and for what they do every single day to support our customers, clients, and communities.”
JPMorgan
Net revenue reached $5.8bn, up 13%, driven by higher management fees and strong net inflows for the asset & wealth management arm of JPMorgan in 2024.
Net income climbed 25% YoY to $1.5bn.
Assets under management (AUM) increased 18% to $4.0trn, while client assets grew to $5.9trn, reflecting strong market performance and net inflows.
Noninterest expenses rose 11% to $3.8bn, primarily due to higher compensation costs and expansion of private banking advisory teams.
Jamie Dimon, Chairman and CEO, stated: “The Firm concluded the year with a strong fourth quarter, generating net income of $14.0bn.”
Dimon continued: “Each line of business posted solid results. In the CIB, clients were active, with IB fees up 49%, and Markets revenue rose 21%. Additionally, Payments fees grew by double digits for the fourth consecutive quarter, helping drive Payment’s revenue to a record $18.1bn for the year. In CCB, we continued to acquire new customers across Consumer Banking, Business Banking, Card, and wealth management. For example, nearly 2 million net new checking accounts were opened during 2024. Finally, in AWM, management fees rose 21%, and revenue hit a record $5.8bn. More impressively, client asset net inflows totalled $486bn in 2024, bringing cumulative net inflows over the past two years to $976bn.”
Dimon added: “The U.S. economy has been resilient. Unemployment remains relatively low, and consumer spending stayed healthy, including during the holiday season. Businesses are more optimistic about the economy, and they are encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business. However, two significant risks remain. Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time. Additionally, geopolitical conditions remain the most dangerous and complicated since World War II. As always, we hope for the best but prepare the Firm for a wide range of scenarios.”
Citigroup
Citigroup’s Wealth division delivered a strong performance in 2024, achieving $7.5bn in total revenues, a 7% increase compared to 2023. This growth was fuelled by higher investment fee revenues and improved deposit spreads, despite some offset from increased mortgage funding costs.
Wealth revenue increased 20% year-on-year to $2.0bn in Q4, reflecting a 22% rise in non-interest revenue and a 20% boost in net interest income.
Private bank revenues rose 9% YoY to $590m, supported by improved deposit spreads and higher investment fee revenues, partially offset by increased mortgage costs.
Client investment assets grew 18% year-on-year to $587bn in Q4.
In addition to this, Citigold revenues grew 11% to $4.25bn, reflecting higher deposit spreads, increased deposit volumes, and robust investment fee revenues.
Citi CEO Jane Fraser shared: “2024 was a critical year and our results show our strategy is delivering as intended and driving stronger performance in our businesses. Our net income was up nearly 40% to $12.7bn and we exceeded our full year revenue target, including record years in Services, Wealth, and US Personal Banking.”
