Matthew Chandler 25 / July / 22

Citi soars by 10% and stimulates the banking sector: more income on rates

Citi stimulates the banking sector and soars by 10%

The good results of Citigroup raised the expectations of the market, and above all of the banking sector. In fact, the KBW Bank banking index soared by 4%, surpassing even the profit reflected today by the S&P 500, and then reduced the growth to 2.5%.

And it is that during 2022, this index was hit, with a 24% drop, and the results of JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) on Thursday momentarily depressed the sector and the market, which closed red that day.

Changing the landscape
However, Citi's results changed the picture: the Bank reflected that due to the increase in rates, it received more interest income, which increased by 9% to $ 11.960 million, which is more than expected. And total revenue grew by 11% more than expected.

While Citigroup's profit declined, the pullback was 27%, which is better than expected and lower than other banks. Although earnings per share S1. 68 was calculated, it was $2,19.

And although Wells Fargo (NYSE:WFC) reflected a 48% decline in second-quarter earnings, similar to JPMorgan's growth, the stock also jumped to almost 8%, as investors began to positively assess the growth, which also affected interest income by 16%.

The main Wall Street indexes are also benefiting from a significant increase in retail sales - after falling in May-and an improved outlook for rate hikes. While the futures markets yesterday reflected an 84% probability that rates rose by 100 pp. n., this probability decreased to less than 10%.

On Friday, the Dow Jones index rose 575 points, or 1.88%, while the S&P 500 index rose 1.64%, or 62 points, and the Nasdaq index rose 1.40%, or 157 points.

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Matthew Chandler
Matthew Chandler
Matthew Chandler 33 years old Born in Edinburgh. Married with one child. Graduate University of Cambridge, Psychology course 2011. Works at Acclaim Studios London.

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