Big banks continue to be a profitable group despite being immensely disliked on the Wall Street, CNBC’s Jim Cramer said Monday.
“I think this group is hated,” Cramer said on “Squawk Box,” shortly after Bank of America reported better-than-expected second quarter earnings. “More hated than I’ve seen than any other time other than 2009 and yet they are making fortunes.” He said later on “Squawk on the Street” that he has “not seen this group as despised as 2009,” during the financial crisis.
Bank of America reported quarterly earnings and revenue Monday that beat forecasts, boosted by loan growth, lower expenses, and a smaller tax rate.
Shares of Citigroup and Bank of America were still lower year to date, while J.P. Morgan stock was about 1 percent higher so far in 2018.
Cramer has previously said Wall Street had written off the bank stocks’ weakness as a casualty of the flattening yield curve. Money managers were making the calculation that if interest rates were similar for long-term and short-term loans, banks would shy away from longer-term lending, a key line of business for the big banks.
The “Mad Money” host said on Monday that Bank of America continued to make money on deposits (also referred to as net interest margin), one of the key signs of success for financial companies.
He said Citigroup’s earnings were also good but the reaction on Wall Street was less than enthusiastic with the bank’s shares falling more than 2 percent on Friday.
“People can’t wait to sell these stocks,” Cramer said. But these “banks are just sitting here saying, ‘Woe is me, I’m brick and mortar.’ [But] younger people love the app. That’s the way to get people to open accounts.”
— Programming note: Bank of America CEO Brian Moynihan appears on CNBC’s “Mad Money” at 6 p.m. ET on Monday, July 16.