JPMorgan widens gap over Wells Fargo adding $2bn more to revenue

Bloomberg

JPMorgan Chase & Co. and Wells Fargo & Co. have long been locked in a fierce race to serve US consumers. One is pulling ahead.
JPMorgan now generates $2 billion more in revenue from its consumer banking unit than its rival, after trailing Wells Fargo by almost $1 billion just two years ago. Jamie Dimon’s New York firm has also grabbed the lead on loans and profit from that business.
Almost three years of public relations struggles and regulatory scrutiny are taking a toll on Wells Fargo, which has about 450 more branches. It’s looking for a new leader after a series of scandals took down two chief executive officers. The San Francisco-based lender has said it’s stemmed the flow of customer defections and isn’t being held back by a regulatory cap on assets, at least for business it wants to pursue.
The gap in performance is set to widen further in the months ahead. As they both reported quarterly earnings, Wells Fargo said companywide net interest income could drop as much as 5 percent this year. JPMorgan has predicted a jump of at least 5 percent for its comparable figure.
“Wells is a broken company that is in need of repair,” said Gerard Cassidy, an analyst at RBC Capital Markets. “JPMorgan, on the other hand is firing on all eight cylinders and moving forward. We expect this divergence in performance to continue while Wells continues to repair its problems.”
Wells Fargo’s stock slipped 2.6 percent while JPMorgan’s jumped 4.7 percent — the most in three years.
Wells Fargo has been reviewing account records and past complaints to address abuses, while launching ad campaigns that vow to earn back the public’s trust. JPMorgan has scooped up consumers with new offerings such as its popular Sapphire Reserve credit card.
For years, Wells Fargo drove growth by pressing branch employees to sell more products to every customer, at times employing a slogan “Eight is Great.”