Deposits, Consumers and Digital Channels in Focus as Bank Earnings Get Underway

It’s the middle of July, almost. And thus: Earnings season begins in earnest.

As usual, a slew of big banks will kick things off, beginning Friday (July 14 ), giving insight into the state of the consumer — at least a bit, with some granular details on card spending and loan performance.

JPMorgan, Wells Fargo and Citigroup will report earnings, and this time around, it will be worth an examination of how deposits have held up, too, in the wake of the banking runs seen this spring, when flight from Silicon Valley Bank and Signature Bank led to an influx of consumer savings at these marquee names.

JPMorgan

The largest U.S. player by asset size, JPMorgan serves as a bellwether for card spending and for anticipation of loans losses amid a rocky economic climate.

JPMorgan Chase’s last quarterly results show debit and credit sales volumes were up 10% year over year to $387.3 billion (credit card sales volume was $266.2 billion, vs. $236 billion a year ago). And as  PYMNTS noted, the company increased its reserves for anticipated loan losses by $1.1 billion. Net loan charge-offs in the quarter were $1.1 billion. The company said in its supplemental earnings materials that the $499 million boost year over year was driven primarily by the card services business.

In a nod to the deposit activity, deposits decreased: The total deposits held by the bank at the end of the latest quarter stood at $2.4 trillion, down about 8% from a year ago.

Active mobile customers were up 9% year over year to 50.9 million.

Wells Fargo

PYMNTS reported that in the wake of last earnings season that there has been volatility in certain lending segments. Auto loans stand out here — and Wells Fargo stands out among the standouts. The late supplementals detailing Wells’ results from the auto segment were down in the March quarter, as measured year over year, to $392 million. The company’s quarterly supplement shows that auto loan originations were down by 32% year over year to $5 billion. The delinquency rate stands at 2.3%, up from 1.7% last year. And in other consumer facing metrics, point of sale credit card volumes were $30 billion, up 16% year over year, while the card loans at least 30 days delinquent were 2.3%, up from 1.6% last year.

Mobile active customers were up 4% to 28.8 million.

Citigroup

Citi’s earnings show that active mobile users were up 11% year over year to 18 million. And credit card spend volumes surged by 9% to $116 billion on its branded cards. Net credit loss as a percentage of those branded cards stood at 2.2%, up from 1.5% last year.

The trends are in place — consumers continue to wield their cards in full force, and do so over digital channels. The most recent inflation data show that price increases cooled to 3%, the lowest level seen in two years. And that may be enough to keep things buoyant at the banks.