![]() ![]() Smith notes that despite consumer credit metrics still deteriorating, banks showed “better-than-feared” metrics in 4Q22, with the majority stipulating a “gradual” return to pre-pandemic loss rates, and not the abrupt and immediate increase the market seems to be readying for. Key items for investors to watch include, “(1) FY23 guidance (we are meaningfully below the Street on difficult interest rate hedge compares and the potential for negative fair value adjustments to its loan portfolio) and underlying assumptions, (2) HFS loan book growth and credit trends, and (3) qualitative commentary around personal loan demand and the whole loan sale and ABS (asset-backed securities) funding environments.” That said, anticipating “strong member and deposit growth,” Smith notes that the company has a “track record” of beating Street Rev/ EBITDA estimates. EBITDA of $36 million, below consensus at $43 million. Street expectations of $426 million.Īs per the company’s guidance, Smith expects notional contribution profit and EBITDA to decline a tad sequentially, calling for adj. Morgan’s Reginald Smith expects adjusted revenue to climb 50% year-over-year (Street has 52%) and up “modestly sequentially.” That will bring Q4 revs to $421 million vs. Before Monday’s market action begins, the fintech company will announce fourth quarter and full year 2022 results.ĭriven by a moderate 5% year-over-year drop in loan originations – compared to the Street at a 7% decrease – J.P. "There is not a huge amount of loan demand in any segment," Pinto said.ġ0:13 AM ET: JPMorgan ( JPM) will be able to navigate volatility or downturns as the company has been " very conservative and disciplined in the way we manage our risk," he said.The week will kick off with a bang for SoFi Technologies ( NASDAQ:SOFI). The bank is seeing some demand in middle market lending, he noted. Big banks, though, haven't changed lending standards thus far.įor example, refinancings are down ~95%, purchase originations down 50%, and mortgage originations down ~75% from their peaks. But the problem is "the demand isn't there" for loans as interest rates rose. Most of the exposure is at regional and smaller banks.ġ0:18 AM ET: Credit conditions are tightening at regional banks. He sees an opportunity for JPMorgan ( JPM) to play a role in refinancing commercial real estate portfolios, especially the lower-quality properties. "It's all going according to plan," he said.ġ0:32 AM ET: Through the process of understanding how the competition operates, JPMorgan ( NYSE: JPM) has discovered bolt-on acquisitions when the company has found that it's cheaper to buy a company than to develop the business itself.ġ0:23 AM ET: In commercial real estate, "we have a very conservative portfolio." retail business is doing well and is ecpected to break even at about 2027. He sees the wallet increasing next year after declining this year.ġ0:39 AM ET: The company thinks this year the wallet for CIB will go down 4% Y/Y.ġ0:35 AM ET: The U.K. "You can only be profitable if you're a player of scale," he said.ġ0:41 AM ET: "It will be a tough year" for investment banking. ![]() "There is no choice you have to do it" because "it's crucial for the future of the company."ġ0:43 AM ET: Pinto believes that the trend for sales and trading to consolidate at larger banks will continue. ![]() ![]() Technology investment has gone up, but that allows for better utilization of its resources, he said. Then there may be a few more rate hikes, he added.Īt some point, there will be a recession, but he doesn't see a crisis.ġ0:47 AM ET: "Technology transformation is the most important thing that we do," Pinto said. It's likely Fed will get to about 5.5% then pause, to see if their rate hikes impact inflation, he said. There are some indications of a slowdown, he said. economy, for now, "are doing fine," President and Chief Operating Officer Daniel Pinto said at the Bernstein Strategic Decisions Conference. ![]()
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