The bank also cut  its dividend as coronavirus pandemic continues to wreak havoc in the economy. Wells Fargo ‘s net loss for the quarter came in at -$2.4 billion, or -66 cents a share, compared to income of +$6.2 billion, or +$1.30 a share  in the year-ago quarter.The loss was steeper than -16 cents a share loss expected by analysts polled by FactSet. Revenue of $17.8 billion was lower than year-ago quarter’s $21.6 billion. Net interest income of $9.88 billion fell -$2.2 billion year-over-year.

Bank of America will report before the open two days later. You could lump these four stocks together with a few other companies and you would have the definition of “too big to fail”.It was used to describe financial institutions that were so big that the overall economy could come under pressure if one of them failed. Since that time the Treasury and the Federal Reserve have a system of tests that they call a "stress test" to measure different aspects of the bank to make sure we don't go through another financial crisis.

Wells Fargo , PNC Financial Services   and KeyCorp   were downgraded by UBS analyst Saul Martinez. Martinez lowered rating on Wells Fargo and PNC to sell and KeyCorp to neutral.  According to Martnez, the banks will undergo losses on their commercial and industrial loans, amid COVID-19 pandemic. He also cut his earnings-per-share forecasts for large-cap banks by an average of -25% for 2020 (excluding Paycheck Protection Program lending) and by -18% for 2021.

Wells Fargo  got its capital constraints relaxed by the Federal Reserve, so the bank can boost lending to small businesses amid COVID-19 crisis. Last weekend, Wells  had capped its lending to small business to $10 billion under the Paycheck Protection Program.The threshold was set by the bank so it could maintain the asset requirement that the Fed had imposed on it February 2018 after finding it guilty of setting up unauthorized accounts.   “Due to the extraordinary disruptions from the coronavirus,” the Fed said in a statement, “it will temporarily and narrowly modify the growth restriction on Wells Fargo so that it can provide additional support to small businesses.”

Bank of America  is the first of US big four banks to have opened the online portal for small-business support program as part of government’s stimulus package amid COVID-19 crisis. The government asked banks to support it in disbursing the $350 billion meant for giving loans to small businesses as part of the $2 trillion coronavirus stimulus bill.  On Thursday, several banks told CNBC that they were not ready due to lack of adequate  guidance from the Small Business Administration and the U.S. Treasury on administering the program.

Goldman Sachs moved Citigroup to its Conviction List. Goldman Sachs analyst Richard Ramsden  mentioned adding Citigroup to the Americas conviction list, on what the analyst perceives as a “realistic path" to a 12.4% return on tangible common equity in 2020 – which places the estimate 70 basis points ahead of market expectations (according to Ramsden ).Goldman cited Citi’s ability to control costs and achieve strong loan growth. 

Bank of America shares got a rating boost from analyst at Baclays.  Analyst Jason Goldberg  raised his rating on the banking stock to overweight from equal weight , with a $43 price target. In his note to investors, Goldberg indicated that significant improvements of Bank of America’s consumer banking ( its largest revenue source), and tailwinds from recent technology advancements  are not fully appreciated by investors. Goldberg  also  expects further market share gains on the wholesale front.He added,"In addition, we expect expansions to remain contained, asset quality to stay benign and share repurchase to continue".  

JPMorgan Chase & Co.  beat  third quarter earnings expectations, on the back of strengths in fixed-income revenue and  net interest income. For the three months ending in September, the financial giant’s earnings rose +14.5% year-over-year to $2.68 per share, which is 23 cents ahead of the Street consensus forecast. Total revenues for the quarter were $29.3 billion, handily topping analysts' estimates of  $27.8 billion. The company’s  net interest income climbed +2.12% year-over-year to $14.4 billion.Equities revenue, however, fell -5% to $1.5 billion. CEO Jamie Dimon emphasized that the company had a record third quarter in investment banking fees, with particularly strong performance in debt capital and equity capital markets.

According to Wells Fargo, its bottom-line took a major hit from $1.6 billion, or 35 cents a share, an amount set aside to cover litigation costs of "previously disclosed retail sales practices matters." The company’s revenue for the quarter came in at $22 billion (higher than the year-ago quarter’s $21.9 billion), and above the $21.1 billion estimate of analysts polled by FactSet. Wells Fargo is reeling from a string of scandals involving past marketing and sales practices, and it remains to be seen how far its incoming CEO Charles Scharf  will be able to extricate the company out of its chequered past and push it towards a more positive direction.

The third-quarter earnings season is set to kick off and the big banks are the first group to step into the earnings confessional.JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) will kick things off when both report before the opening bell on October 15.

Equities trading fell -13% to $1.15 billion, falling short of the $1.22 billion estimate.Profit in its global banking business fell -9% to $1.93 billion on a drop in capital markets deals.

Morgan said that an apparent one-time tax advantage came from the resolution of “certain tax audits” that boosted the company’s per share earnings by 23 cents. Total revenue for the company increased +4% to $29.57 billion, surpassing analysts’ expectations of $28.9 billion. The bank’s revenue from its fixed income trading business increased +7% to $3.69 billion, which exceeded estimate of $3.36 billion.But its equities trading division revenue fell -12% to $1.73 billion, missing analysts’ estimate of $1.84 billion. The company lowered its forecast for 2019 net interest income to $57.5 billion, compared with its prior prediction of $58 billion.  

Wells Fargo reported its second quarter earnings, which surpassed analysts’ expectations. The bank’s diluted earnings for the three months ending in June came in at $1.30 per share, exceeding the Street consensus estimates of $1.15 per share.Net interest income also declined, by $533 million to $13.4 billion, as mentioned by the bank.

After passing the Federal Reserve's stress tests, several U.S. big banks announced bigger dividends while bulking up share buyback plans. The annual stress tests  are the Fed’s assessment on whether banks have adequate capital to absorb losses during severe economic downturns.It said that it can buyback $21.5 billion in stock. Morgan Stanley increased its dividend to 35 cents a share from 30 cents, and can buy back $6 billion in stock. Bank of America raised its dividend to 18 cents a share from 15 cents, and could repurchase up to $30.9 billion of shares.  

UBS has lost a lead role on a U.S. dollar bond deal for state-backed China Railway Construction Corp, just days after a Chinese outcry over a senior UBS economist’s use of “pig” in connection with Chinese food price inflation.

It’s becoming a worrying trend that in the U.S., people are borrowing more and paying more each month for their auto loans. Analysts recorded that the average amount borrowed to buy a new vehicle hit an unforeseen $32,187 in the first quarter of 2019, and the average used-vehicle loan also hit a record $20,137.Consequently, the average monthly payment for a new vehicle steadily rose to a new high of $554 and to $391 for used vehicles. However, people with even the best credit scores are opting for used vehicles.

Citigroup Inc., Royal Bank of Scotland Group Plc and JPMorgan Chase & Co. are among five banks named in a class action lawsuit in Australia seeking damages for colluding on foreign-exchange trading strategies.  

JPMorgan Chase & Co has cut ties with Purdue Pharma LP over the OxyContin maker’s alleged role in the U.S. opioid crisis, forcing it to find a new bank to manage cash and bill payments, people familiar with the matter said on Thursday.

Twitter, Inc. TWTR 4.21% traded higher on Wednesday on reports the company is experimenting with its ad load, and one analyst said Thursday that improving Twitter’s ad business is one of several reasons for investors to love the stock.

Amidst the backdrop of persisting trade disputes between U.S and China, and following President Trump’s tariff hike from 10% to 25% on $200 billion worth Chinese goods, global equities took a hit this past week as investors withdrew more than $20.5 billion from equity funds. Analysts at Bank of America Merrill Lynch (BAC) revealed that cash outflow from equity funds were the third highest this year.Overall, equity fund outflows totaled $116 billion this year, the worst showing since 2016. On the other hand, bonds - perceived as safe heaven during times of market distress - reached their 18th consecutive week of cash inflows totaling $7.3 billion.