Investors wary on bank growth

While big US bank bosses were optimistic on the economic outlook on Friday, pointing to an uptick in some lending businesses and a jump in consumer spending, investors were skeptical on the growth outlook for the sector.

JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co, bellwethers of the US economy, reported combined profits of $19 billion for the fourth quarter, each comfortably beating analyst estimates.

However, analysts noted that the beats were helped by reserve releases and other one-off items and that underlying performances were less compelling.

Bank shares across the board were down 2.1 per cent, with only Wells Fargo bucking the trend amongst the top six, amid worries over a decline in trading revenues and loan growth. "Investors are concerned about where growth is going to come from," said Viola Risk Advisors bank analyst David Hendler.