Wells Fargo & Co (WFC) Was Beaten By JPMorgan Chase & Co. (JPM) And Citigroup Inc. (C)

JPMorgan Chase & Co. (NYSE:JPM) kicked off the earnings season as its first quarter’s earnings surged 33% to $6.5 billion. Unlike Wells Fargo, JPMorgan was also able to report a 37% increase in its mortgage originations during the quarter. JPMorgan Chase & Co. (NYSE:JPM)’s first quarter bottom line of $1.39% surged around 20% compared to the linked quarter. However, like Wells Fargo & Co (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM) also reportedly saved $248 million during the quarter. JPMorgan Chase & Co. (NYSE:JPM)’s Basel III Tier 1 common ratio was estimated at 8.9%, up 20 bps over the prior quarter.

The earnings per share of $1.17 per share for Citigroup Inc. (NYSE:C) surged 22% over the prior quarter. Despite a strong quarter, management was cautious due to the prevailing challenging environment marked with increased regulation and low interest rates. During the quarter the bank funded $18 billion in mortgages in the North American region, which is 26% above the prior year’s funding. During the quarter, Citigroup Inc. (NYSE:C) experienced a 2% year over year decline in its operating expenses, while at the same time it also improved its capital position as its Basel III Tier 1 common ratio improved 60 bps to 9.3%.

Conclusion

Wells Fargo demonstrated strong performance during the first quarter of the current year. This can be seen in its improved asset quality, robust capital position, better expense management and higher income. However, the capital position of its peers appears to be more robust. Further, the decreasing mortgage originations at Wells Fargo & Co (NYSE:WFC) are a cause of concern, particularly when originations at Citigroup Inc. (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM) are increasing. Since Wells Fargo has a large exposure in the US housing market, I would recommend investors stay away until the bank’s mortgage origination pipeline shows improvement.

The article Wells Fargo Was Beaten By JPMorgan and Citigroup originally appeared on Fool.com and is written by Adnan Khan.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.