Deutsche Bank Tweaks Target Prices For JPMorgan Chase And Citigroup

Deutsche Bank goes through the the third quarter results and discusses the future prospects

The best time to judge a bank’s performance is during the earnings season for the finance market. The markets have experienced a lot of turmoil and uncertainly has also increased thus investor a particularly keeping a close eye on the earnings for banks after which they can decide about making the investments. The earnings call was released by JPMorgan Chase & Co. since the time they have announced their earnings for the third trimestral of the fiscal year of 2015.

Many analysts believe that the earnings from the big banks set a pattern for the industry and other sectors to comply too.so by taking the common catalyst into consideration along with other driving forces, analysts and sell side firms have modified their approach on various banks and industry. Deutsche Bank has also come up with its research note where they have reviewed the United States based banks for their results during the third quarter.

There were a total of 16 banks which the research firm deals with, where six of them failed to achieve their consensus estimates. For those banks that succeeded in surpassing or meeting the Earnings per Share estimates observed a 50 basis point increase in the average share price. Apart from that the banks that missed on the estimates observed a 0.9% increase in the stock price.

The net interest income is said to have increased by almost 2.4% on a year over year basis in the third quarter which has observed a growth since 2010. This growth was merely because of the increase in the loan growth because of which extensions were given by the banks. The balance sheets however increased on a modest pace where the earnings assets grew by 1% on a quarter over quarter basis where the average has also increased by 5.1%.

The capital markets experienced a tough time where the revenues reported worsened than the expectations. Operational revenues were now down by 12% when considering the same quarter for the previous year’s fixed income, currencies and commodities. The FICC ha also gone down by 23% on a year over year basis where trading equities have increased by 12%.

So by taking the earnings call along with the financial results of various banks into consideration, Deutsche Bank has slashed the estimates for the fiscal year of 2016 and 2017 EPS over a time span of past two weeks. The cause behind the reduction is the staggering interest rate.