“Second quarter credit performance was in line with our expectations,” Wells Fargo CEO Charlie Scharf told analysts. “Consumers benefited from a strong labor market and rising wages. Performance of our consumer auto portfolio continues to improve.” , reflecting previous credit tightening actions and a net recovery in our home loan portfolio.
Citi, the smallest of the three largest depository institutions in the mortgage sector, originated $4.3 billion in home loans from April to June, up 39% from the previous quarter but down 4% from the same period in 2023.
JPMorgan also expanded its service portfolio in the second quarter amid higher origination levels, while Wells Fargo did not. JPMorgan’s mortgage servicing rights (MSR) increased to $8.8 billion in the second quarter of 2024 from $8.6 billion in the first quarter of 2024 and $8.2 billion in the second quarter of 2023.
Meanwhile, Wells Fargo’s MSR, measured as ending book value, fell 3% from the previous quarter to $7 billion in the second quarter of 2024.
generate income
Home loan activity generated $1.3 billion in net income for JPMorgan Chase in the second quarter of 2024, an 11% increase from $1.18 billion in the previous quarter. The bank’s service revenue in the second quarter of 2024 was $189 million, compared with $144 million in the previous quarter.
JPMorgan Chief Financial Officer Jeremy Barnum told analysts that the performance in home loan income was “primarily driven by higher net interest income.”
Wells Fargo’s home loan-related income in the second quarter of 2024 was $823 million. %.
Chief Financial Officer Michael Santomassimo said Wells Fargo’s revenue decline reflected its focus on streamlining its home lending business and the continued decline in the mortgage market. “Since announcing the new strategy in early 2023, we have reduced headcount in our home loan division by approximately 45%,” he said.
The bank also generated $243 million in mortgage banking non-interest income in the second quarter of 2024, up from $230 million in the previous quarter. Its net services revenue fell 2% from the previous quarter but increased 44% year over year to $89 million.
Overall, JPMorgan posted a profit of $18 billion, or $13.1 billion when excluding special items such as billions of dollars in gains related to a project. visa Chief Executive and Chairman Jamie Dimon said the economy “made some progress with lower inflation” in the second quarter.
“But multiple inflationary forces remain before us: huge fiscal deficits, infrastructure needs, trade restructuring and the remilitarization of the world. As a result, inflation and interest rates are likely to continue to be higher than market expectations,” Dimon said in a statement express.
Wells Fargo’s second-quarter net profit was US$4.9 billion, while Citigroup’s net profit during the same period was US$3.2 billion. Citi Chief Executive Jane Fraser said the bank has made “incredible progress on strategic and organizational simplification.”
