Corporate finance

Discover Financial Services posted a healthy fourth-quarter increase in card spending and lending, but analysts raised concerns about a sharp rise in credit account charge-offs that's likely to continue into 2024.

Both Silvergate and Signature banks, two of the most active crypto counterparties in the banking sector, received advances from the quasi-governmental lenders to offset falling deposits.

The Pittsburgh bank posted a solid profit and said that it expects continued loan growth. But the pace of business expansion could slow alongside an economic downturn.

The Mississippi bank said it fell short of funding its loans with deposits in the fourth quarter of 2022. This year, it plans to narrow its focus to core relationship lending.

Neobanks and online lenders are expected to address credit concerns, product development and balance sheet resilience in upcoming reports.

CEO Bruce Van Saun said that any potential recession will likely be "subdued," as the Rhode Island bank projected a rebound in noninterest income.

Goldman Sachs provided more details on its pullback from its once-grand ambitions to expand into consumer finance. Though parts of that strategy will remain, the New York bank will halt its personal loan business and postpone offering a checking account for its wealth management customers.

The New York bank reported a 17% drop-off in deposits during the fourth quarter as it sought to reduce its concentration in the digital currency realm. It expects its balance sheet to stabilize in the second half of 2023.

Rising deposit costs and the likelihood of a slowdown in loan growth could stifle earnings, credit union executives say.

Silvergate Capital Corp. reported a $1 billion loss and said it would offboard some noncore digital-asset customers following a quarter that saw a dramatic draw-down in deposits after the collapse of Sam Bankman-Fried's FTX.

Signature Bank of New York is pulling back from crypto deposits and has increased borrowings from the Federal Home Loan Bank of New York.

Further interest-rate hikes by the Federal Reserve will force Bank of America to continue repricing deposits, which fell 6.5% in the fourth quarter compared with a year earlier, executives said.

JPMorgan Chase, Wells Fargo and the Bank of New York Mellon all announced plans to restart or increase their buybacks this year after a sharp drop-off in 2022. Bank of America's CEO also said the company is "back in the game."

For the fourth straight quarter, the nation's largest bank boosted its loan-loss reserves, this time setting aside $1.4 billion to cover potentially souring loans. Other big banks made similar moves as the industry braces for a potential recession.

The New York bank, which recorded an 8% increase in expenses last year, projects that they will rise by 5% in 2023. Other megabanks are also contending with higher costs.

Despite the layoffs across the finance industry, there were no signs of a staffing pullback in JPMorgan Chase or Bank of America's fourth-quarter results. Wells Fargo's headcount dropped to 238,698 from 249,435 a year earlier

Net interest income rose 29% in the fourth quarter on higher rates and loan growth, though the increase was smaller than forecast. Trading revenue soared 27%.

Citigroup's fixed-income traders turned in a record-setting finale to 2022 as the bank, under pressure to improve returns, braced itself for a less certain economy.

The bank spent $16.2 billion in the last three months of 2022, exceeding analyst estimates.

The company said NII will be about $73 billion this year, below the $74.4 billion estimate of analysts. The forecast followed a record haul of $20.2 billion from net interest income in the fourth quarter.