Banks are expected to release some of the rainy-day money they set aside after the COVID-19 pandemic hit to boost their first-quarter profits, the WSJ reported.
- Analysts expect banks to release their reserves to boost their bottom lines after setting aside tens of billions of dollars in reserves in preparation for loan losses.
- The reserves were booked against profits, dragging income for the first six months of 2020.
- The KBW Nasdaq Bank index, which tracks shares of the largest lenders, is up 25% year-to-date after returning to a record in March. This is more than double the gains of the S&P 500.
- JPMorgan Chase & Co. and Goldman Sachs Group Inc. will disclose financial results on Wednesday; Bank of America Corp. and Citigroup Inc. on Thursday; and Morgan Stanley on Friday.
- Analysts forecast all the banks to post sharp increases in their first-quarter profits from the same period in 2020.
- Bank shares were in the doldrums this time last year when global commerce ground to a halt but have since bounced back over the past few months.