New York lenders Morgan Stanley, JPMorgan and Citi Profits will fall due to the slowdown in mergers and acquisitions
On Thursday, data from Refinitiv had revealed that the world’s biggest lenders would most likely see their quarterly profits fall for the first time in seven quarters, mainly due to an ease in mergers and acquisitions alongside a drastic depreciation of stocks. equity and debt. broadcast agreements.
Apart from that, according to data from Refinitiv, the combined net profits of major US lenders such as JPMorgan, Morgan Stanley alongside Citi are likely to be plunged by more than 2% in the quarter ending on March 31, 2022, compared to a quarter earlier, which would actually mark the first quarter-over-quarter (quarter-on-quarter) earnings decline for the aforementioned lenders since the second quarter of 2020, when the pandemic nearly grounded operations worldwide.
Refinitiv’s latest research report on the earnings of the world’s leading lenders in the first quarter of 2022 covered 65 multinational banks with a market capitalization above $10 billion..
The world’s major lenders will face the first quarterly drop in profits since the second quarter of 2020
On top of that, following the release of the report, several analysts were quoted saying that a decline in earnings alongside increased losses due to weeks of wild swings in the prices of both riskier and safe-haven assets – largely pivoted by Ukrainian uncertainty – likely to scalp Q1 earnings.
However, a catastrophic loss in first-quarter earnings could be avoided by an increase in earnings from interest, analysts have suggested.. Meanwhile, adding that M&A optimism hit rock bottom in the first quarter, a Franklin Templeton portfolio manager wrote in a client note: “Market volatility can make it more difficult to issue stocks and debt securities, reducing revenue for those areas of the business that focus on underwriting new stocks and bonds as their primary source of income.
This could weigh on corporate results, even as their traditional banking operations benefit from increased (net interest income) and faster loan growth.”