The biggest U.S. banks, led by JPMorgan Chase & Co. (JPM:US), are benefiting from credit cards amid a decline in mortgage lending and a trading slump.
Card revenue rose 3.1 percent to $1.55 billion in the second quarter from a year earlier, New York-based JPMorgan said today in a statement. Growth in card fees outpaced revenue gains in investment banking, lending and deposits and mortgages for the fourth consecutive quarter, the firm said.
“Consumers are spending very strongly,” Chief Financial Officer Marianne Lake said today on a conference call with analysts. “It’s travel, it’s restaurants, it’s retail -- it’s across the board.”
Banks are profiting as consumers globally replace cash and checks with electronic forms of payment. Credit- and debit-card transactions worldwide could jump 74 percent to 288.6 billion in 2018 from six years earlier, according to the Nilson Report, an industry newsletter. Card spending in the U.S. totaled $4.08 trillion last year, the data show.
Citigroup Inc. (C:US) said yesterday that card revenue rose 2.6 percent to $5.31 billion in the second quarter from a year earlier. At Wells Fargo & Co., fees from cards rose 4.2 percent to $847 million, the San Francisco-based bank said July 11.
U.S. retail sales increased 0.2 percent in June, the Commerce Department said today, as more Americans returned to work. The U.S. unemployment rate fell to 6.1 percent, the lowest level in more than five years, as payrolls surged in June by 288,000 workers, the government reported July 3.
Bank of America Corp. (BAC:US), the biggest debit-card issuer in the U.S. by purchases, and Minneapolis-based U.S. Bancorp, which generates about 28 percent of its revenue from cards, report second-quarter earnings tomorrow.
JPMorgan is the largest credit-card issuer in the U.S., while Citigroup ranks third.
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