Are the Monster Banks making Money at Wells Fargo & Bank of America? — Market Mad House

Many people will wonder if monster banks, such as Wells Fargo (NYSE: WFC), are still a value investment. Investors fear the economic and political chaos rocking America will destroy the monster banks.

Monster bankers are suffering. Stockrow estimates Wells Fargo & Company’s (NYSE: WFC) revenue growth rate fell by -19.65% in the quarter ending on 31 March 2020. Similarly, Bank of America’s (NYSE: BAC) revenue growth shrank by -7.17% in the same period.

Interestingly, that was the second quarter of revenue growth shrinkage for both monster banks. B of A’s of revenue growth fell by -3.12% in last quarter 2019. Likewise, Wells Fargo’s revenue growth shrank by -3.97% in the last three months of 2019.

Hence, the two monster banks’ revenue growth rates were shrinking before coronavirus. Now that revenue growth is collapsing rather than shrinking.

Are the Monster Banks Losing Money?

Wells Fargo still makes money but it makes less money. For instance, Wells Fargo’s quarterly operating income fell from $3.902 billion on 31 December 2019 to $664 million three months later.

In comparison, Bank of America’s; or B of A’s, quarterly operating income fell from $8.169 billion on New Year’s Eve 2019 to $4.531 billion on 31 March 2020. Hence, both big banks’ operating income is in free fall.