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With Vaccines and Stimulus on the Way, Banks Brighten Their Outlook

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The results showed that JPMorgan’s retail customers have been buying houses and cars. The number of mortgages and auto loans rose 20 percent compared with a year earlier. The bank’s profit from stock trading jumped 32 percent, while earnings from trading in bonds, currencies, commodities and other products rose 15 percent from the same period a year earlier.

Citigroup said on Friday that it had released nearly $1.5 billion from its reserves, but it was not enough to raise its quarterly earnings above what it earned in the same period in 2019. The bank reported a profit of $4.6 billion on revenue of $16.5 billion. Both its revenue and its earnings were lower than they were a year earlier.

The bank’s earnings were hit as its credit card users around the world reduced their activity. Deposits grew in its global bank by 19 percent, but the amount it earned from card usage declined, one component of a 14 percent drop in revenue. On Wall Street, Citigroup bested its performance a year earlier. Stock trading earnings rose 57 percent, while earnings from trading in bonds and other products increased 7 percent.

Wells Fargo also released $757 million from its reserve pool, but it said the change was driven by the sale of its student loan business rather than any reassessment of its economic outlook. The bank earned $3 billion in the fourth quarter, just slightly more than it did in the same quarter in 2019, even though its revenue fell to nearly $18 billion from $19.8 billion.

The banks still expect that many of their customers will eventually reach a point at which they can no longer pay back some of their loans and there are no more stimulus funds or unemployment benefits to keep them afloat. But, at the moment, that reckoning looks farther out — perhaps as late as the middle of next year, because of the fresh stimulus. In the meantime, many borrowers who seemed like they might have trouble paying their bills have been better at keeping up payments than expected, Citi’s Mr. Mason said.

Wells Fargo’s chief executive, Charles W. Scharf, said the bank’s results, which showed significant expenses that cut into its ability to earn profits, reflected its efforts to move on from its past abusive practices. The bank has had to revamp how it monitors its operations to identify illegal or harmful activities, and has plowed significant sums into the overhaul.

“We are making progress,” Mr. Scharf said in a statement accompanying the financial results. He noted that the improved economic outlook offered an additional source of hope.

“With a more consistent, broad-based recovery, and as we continue to press forward with our agenda, we expect you will see that this franchise is capable of much more,” Mr. Scharf said.

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