WASHINGTON — Two of the nation’s largest banks on Tuesday reported mixed earnings results for the end of last year, a potential caution sign on the state of the economy heading into 2019.
Wells Fargo & Co. and JPMorgan Chase & Co. missed expectations on revenue for the October-through-December period.
Wells Fargo’s profit fell slightly compared with a year earlier as the bank continued to deal with a cap on its assets put in place by federal regulators after a series of scandals — a restriction now expected to remain in place through the end of the year.
The $6.06 billion in profit from October through December that Wells Fargo reported was down from $6.15 billion in the fourth quarter of 2017.
Revenue was $21 billion, down from $22.1 billion a year earlier.
Still, the bank’s earnings of $1.21 a share beat analyst expectations of $1.18 a share.
That was a better performance than JPMorgan Chase, which also reported earnings Tuesday.
Investors are watching big banks’ earnings this week for signs of the direction of the economy and the effects of the recent stock market volatility.
Wells Fargo stock closed down 1.6 percent, at $47.67 Tuesday.
JPMorgan Chase shares were up — about 0.7 percent, to $101.68 — along with the three major stock market indexes, as investors brushed aside any potential concerns raised by the earnings results.
JPMorgan Chase, the nation’s largest bank, reported quarterly profits that missed analyst expectations for the first time in nearly four years. Trading revenue was down about 6 percent amid the stock market gyrations.
The bank’s $7.1 billion in profit was a fourth-quarter record and up 67 percent from a year earlier, but earnings per share of $1.98 were below expectations of $2.20.
Banks have been expected to have had great earnings last year because of the tax overhaul championed by President Trump, which slashed the corporate tax rate to 21 percent from 25 percent at the start of 2018. Boosted by the tax changes, Citigroup reported fourth-quarter profits Monday that beat analyst expectations.
Financial market volatility took a toll on bank trading income in the fourth quarter.
Wells Fargo has also been dealing with the fallout from its unauthorized accounts scandal and other controversies. A year ago, Federal Reserve regulators ordered the bank to cap its growth and improve its corporate governance. Fed officials have said Wells Fargo must enact significant reforms before it can be removed.
This fall, the bank announced it planned to cut its workforce by 5 percent to 10 percent within three years.
Wells Fargo continues to face controversy. On Tuesday, Sen. Elizabeth Warren, D-Mass., wrote to Chief Executive Tim Sloan asking for information about “exorbitant fees” the bank charges college students. Warren cited a report by the Consumer Financial Protection Bureau that found Wells Fargo had overwhelmingly higher fees than other banks for college student bank accounts.