J.P.Morgan, Wells Fargo and Citigroup kick off earnings season
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J.P.Morgan, Wells Fargo and Citigroup kick off earnings season
J.P. Morgan, Wells Fargo, and Citigroup kicked off the earnings season, Adyen launched “Tap to Pay” for Android devices, and Payoneer announced laying off 9% of its staff
Hi!
Hope you had a great weekend as we are heading into a busy week! J.P. Morgan, Wells Fargo, and Citigroup kicked off the second-quarter earnings seasons on Friday. This week we will hear from the rest of the big banks, as well as credit card issuers American Express, Capital One, and Discover.
In the meantime, let’s review a few stories from the previous week:
J.P. Morgan, Wells Fargo, and Citigroup kicked off the earnings season,
Adyen launched “Tap to Pay” for Android devices, and
Payoneer announced laying off 9% of its staff
Thank you for reading and have a great day!
Jevgenijs
p.s. have feedback? DM me on Twitter
J.P. Morgan, Wells Fargo, and Citigroup Kick Off Earnings Season
U.S. banks, including JPMorgan Chase, Wells Fargo, and Citigroup, kicked off the second-quarter earnings season on Friday by beating earnings estimates and praising a resilient economy. Aided by the acquisition of First Republic Bank, J.P. Morgan reported a 67% YoY increase in net income, with the return on common tangible equity surging to 25%. Wells Fargo reported a 57% YoY increase in net income and a return on common tangible equity of 13%. The banks benefited from higher interest rates and robust consumer spending and borrowing, defying the concerns about a slowing economy.
Executives from the banks expressed confidence in the strength of the economy, particularly regarding U.S. consumers. However, they also acknowledged significant uncertainty about the future. JPMorgan CEO Jamie Dimon stated that he is unsure whether there will be a soft landing, a mild recession, or a hard recession. Although loan defaults increased slightly, they are still at historically low levels. The big banks have reserved funds for potential future defaults, primarily in commercial real estate, but the amounts set aside were not as substantial as during previous economic downturns.
✔️ JPMorgan’s Best Quarter Ever Shows Big Banks Are in Rate Sweet Spot
✔️ U.S. banks point to resilient but slowing economy
✔️ Big-Bank Earnings Show Signs of Soft Landing
Adyen Launches Tap to Pay for Android Devices
European payments giant Adyen (AMS: ADYEN) is expanding its in-person payment solutions with the launch of “Tap to Pay” on Android. This software-based solution enables businesses to use compatible Android devices, such as smartphones, tablets, kiosks, and handheld devices, as payment terminals, accepting contactless payments and reducing checkout friction. The service will initially be available in the US and Singapore. Adyen launched the “Tap to Pay” product for iOS devices in the summer of 2022.
The company also partnered with Oracle Food and Beverage to integrate the solution into point-of-sale systems commonly used in the hospitality industry. Oracle, a renowned provider of such systems worldwide, serves customers in 180 countries and processes over $150 billion USD in transactions annually. Through this collaboration, Oracle will incorporate Adyen's “Tap to Pay” solution into its Oracle Payment Cloud Service aiming to provide an intuitive checkout process and reduce hardware requirements for businesses in the food and beverage industry.
✔️ Adyen expands in-person payments solutions with Tap to Pay on Android
✔️ Adyen goes live with Tap to Pay on iPhone
Payoneer Lays Off 9% of Its Staff
The cross-border payments company Payoneer (NASDAQ: PAYO) plans to reduce its total staff by 9%, according to the filing with the SEC. The company, which currently employs 2,000 people globally, expects to complete the layoffs by the end of the third quarter. The reduction in the workforce is aimed at “enhancing productivity and efficiency” while aligning the company's operations with its growth objectives. Payoneer anticipates charges of approximately $5 million in the third quarter for severance payments and payroll taxes but expects an annualized benefit of about $20 million in operating expenses.
Payoneer plans to reinvest the savings into future growth initiatives and continues hiring for essential roles in research and development. In the first quarter of 2023, the company reached GAAP profitability reporting a Net Income of $7.9 million on total revenue of $192 million. Revenue increased by 40% compared to the first quarter of the previous year driven by higher interest income from customer funds held on the platform. Payoneer raised its full-year 2023 guidance to $810-820 million in revenue and $140-150 million in Adjusted EBITDA, as well as announced the plan to repurchase up to $80 million of its outstanding common stock.
✔️ Payoneer to Reduce Headcount 9% to ‘Enhance Productivity and Efficiency’
✔️ Payoneer to Announce Second Quarter 2023 Results on August 8, 2023
The stock performance of Visa (NYSE: V), Mastercard (NYSE: MA), American Express (NYSE: AXP), Capital One (NYSE: COF), Discover (NYSE: DFS), and Synchrony (NYSE: SYF) suggests that investors are not buying the recession story. As can be seen from the chart below, the stocks of these companies have been on a rally since early May. A recession would undermine the fundamentals of these businesses through lower consumer spending and higher default rates.
Fintech Partnerships Vice President
@ J.P.Morgan
🇺🇸 San Francisco, CA, United States
Fintech Partnerships - Executive Director
@ J.P.Morgan
🇺🇸 San Francisco, CA, United States
VP Engineering - Platform and Financial Services
@ Adyen
🇺🇸 Chicago, IL, United States
@ Adyen
🇺🇸 Chicago, IL, United States
Product Compliance Director - Customer Onboarding
@ Payoneer
New York, NY, United States
Cover image source: J.P.Morgan
Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.