Wall Street wasn’t banking on profits
TEXT OF STORY
Scott Jagow: A ton of banks are reporting their profits this week — or lack of them. Today, it’s Bank of America’s turn. Actually, things haven’t been nearly as bad as Wall Street expected. Jill Barshay reports.
Jill Barshay: Banks have done pretty well this week. JP Morgan’s profits were up. Wells Fargo says it did pretty well in its mortgage business.
Joe Morford at RBC Capital Markets says despite what you might think, most banks are weathering the storm.
Joe Morford: Given some of the fears we had a couple months ago, banks are holding their own. We’re not seeing big losses.
Most banks didn’t make a lot of subprime loans, so they dodged that bullet. Profits in JP Morgan’s private-equity division offset its bond losses.
Still, Morford says the trouble’s not over:
Morford: The greatest areas of stress are in residential construction lending, given the significant downturn in the housing market, and home-equity lending as well. And what’s a bit scary now is that even the more conservative, disciplined lenders are feeling some pain and taking their lumps.
Morford says banks are in for a beating next quarter. He’s down-grading bank stocks.
In New York, I’m Jill Barshay for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
