America: Washington isn’t looking out for you.
That’s assessment of Jamie Dimon, the outspoken CEO of JPMorgan Chase, which on Friday kicked off U.S. banks’ second-quarter earnings season.
Never one to hem and haw, Dimon, who leads the nation’s biggest bank by assets, unleashed a tirade against the “stupid” political dysfunction in Washington, D.C. Friday in his earnings call, prompting strong reactions and his name to trend on Twitter.
“It’s almost an embarrassment being an American citizen traveling around the world and listening to the stupid s— we have to deal with in this country, and at one point we all have to get our act together or we won’t do what we’re supposed to (do) for the average Americans,” he said.
His remarks overshadowed revelations of rising revenues at his bank, Wells Fargo and Citigroup — which have seen consumer demand for their services grow amid a resilient job market and low-interest rates.
The Federal Reserve is expected to increase its key short-term rate in the coming months, which could muddy the outlook for interest income growth. Global investment banking demand remains tepid. And as Dimon reminded Wall Street, many of the promised reforms for the sector have not come to pass, keeping some companies from taking on debt to expand operations.
Financial shares fell during the day with some regaining ground by market close. JPMorgan shares ended down 1%, while Wells Fargo fell 1.1%. Citigroup slipped less than 1%.
“Bank stocks are down amid negative forward guidance from JPMorgan and others regarding net interest income,” said Charles Gabriel, president of Capital Alpha. “In having to explain that to investors, Dimon blamed Washington for dragging its feet on tax reform, which has been expected to boost economic growth and therefore interest rates.”
JPMorgan, whose second-quarter net income rose 13%, warned that its net interest income for the year would rise by about $4 billion, lower than the $4.5 billion estimate issued in the last quarter. Revenue spiked 5% to $26.4 billion.
Wells Fargo’s second-quarter earnings climbed 4.5%. But revenue was relatively flat as it continues its recovery from a fake-account scandal federal and state investigators disclosed last year. Wells Fargo’s count of consumer checking account customers rose less than 1% year-over-year.
Citigroup’s revenue climbed 2% to $17.9 billion as deposits and loans grew. However, profit fell 3% as stock and bond trading revenue came in lower.
Contributing: Adam Shell