Analysts have cut their earnings estimates for the top five U.S. banks by over $1B in total, due to increasing fears about a sharp fall in trading revenue - especially from fixed-income operations - and higher legal costs.
JPMorgan (JPM) has been particularly affected, with consensus for net income down $526M to below $5B. The company's legal woes are seen adding $2B to expenses.
Analysts have lowered their net income for Bank of America (BAC) by $128M, for Goldman Sachs (GS) by $123M, for Morgan Stanley (MS) by $97M, and for Citigroup (C) by $210M. The latter has already reportedly told investors about a sharp drop in trading revenues.
Banks had hoped a big September would help offset a slow summer, but that hasn't happened.