The economic shocks of 2022 and early 2023 appear to have calmed, but geo-political and financial conditions remain far from easy for banks and their corporate clients. For banks, the windfall gains from net interest margin are eroding as corporate clients demand more yield from deposits. Compliance challenges burden banks, but they need to become more agile and deliver solutions faster.
The largest US banks announced earnings earlier this month, and the results show somewhat subdued growth from earlier this year.
JPMorgan Chase Payments (CB) business combines cash management, payment solutions, and merchant services to corporate clients, financial institutions, and governments. Payments revenue was $2.1 billion, up 3%. Excluding the net impact of equity investments, which reflected an impairment in the current period, Payments revenue was up 12%, driven by higher rates, partially offset by lower deposit balances.
Bank of America Global Transaction Services revenue was $8.8 billion YTD, up 20% YoY. They also reported 813k CashPro App sign-ins, up 41% YoY, and $192B in CashPro App payments, up 16% YoY.
Citi Institutional Clients Group reported that Treasury and Trade Solutions’ revenues of $3.6 billion increased 12%, driven by 17% growth in net interest income and a 1% growth in non-interest revenue. Higher interest rates and deposit volume growth primarily drove the increase in net interest income. The increase in non-interest revenue was driven by continued growth in underlying drivers, primarily offset by the impact of Argentina’s currency devaluation on our net investment in the country.
Wells Fargo Corporate and Investment Banking delivers a suite of capital markets, banking, and financial products and services to corporate, commercial real estate, government, and institutional clients globally. The bank reported Treasury Management and Payments 3rd quarter revenue of $747MN, an 11% YoY increase.
PNC Corporate & Institutional Banking reported card and cash management fees decreased by $8 million as increased treasury management product revenue was more than offset by lower consumer transaction volumes.
The Celent team looks forward to sharing our perspectives on how these announcements influence what’s coming in 2024 for Corporate Banking. Please register for our upcoming Corporate Banking Previsory webinar, “Faster, Safer, Smarter: The New Innovation Imperative,” scheduled for November 15 @10am EST/3pm GMT. We’ll discuss critical trends from customer engagement to open ecosystems, payments, and product innovation. We aim to provide strategic technology insights to help you stay ahead of the curve.