The strengthening of banks’ investment, lending and trading businesses added to the enthusiasm. All three reported strong revenue across multiple lines of business, driven by a combination of active and emerging markets, a spate of new mortgage activity and an upsurge in special-purpose acquisition companies or SPACs. Corporate merger and acquisition activity marked a time higher than the value of the dollar.
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Goldman – a major player in corporate advisory services and markets – reported double-digit percentage gains in investment banking, currency management and markets to double revenue from $ 8.7 billion to $ 17.7 billion. JPMorgan reported a 14 percent increase in revenue from $ 29 billion to $ 33.1 billion, driven by both markets and investment banking.
Wells Fargo’s revenue rose 2 percent, with home loans increasing 19 percent, partly as Americans moved from cities to more suburban or rural areas. The results “reflect an improvement in the US economy,” but the low interest rate and sluggish demand for loans were a “headwind”, the bank’s chief executive, Charles W.
Banks have been – if somewhat unexpectedly – stressed in the past year by beneficiaries of government spending that wanted to prevent the shock of the virus-related economic shutdown from sending the economy to long-term tailspin.
A few years ago, the Federal Reserve cut interest rates to near zero and resumed its bond-buying programs, effectively injecting trillions of dollars into financial markets, leading to the issuance of mortgages, corporate bonds And the deals helped bolster activity.
Since then, the stock markets have risen by more than 80 percent, amid a boom in trade occurring this year. Both factors helped banks, which have businesses that buy and sell shares for customers. Goldman’s equity business generated revenue of $ 3.7 billion in the first quarter, up 68 percent from the previous year. JPMorgan’s stock exchanges rose 47 percent to $ 3.3 billion.
Looking ahead, many banks saw the impact of recent violations of incentive checks on consumer accounts – a component of nearly $ 5 trillion the federal government has allocated to fight last year’s crisis. Bankers said the influx of federal dollars has helped strengthen the financing of American families over the years.