BANKING
Policy changes helping sector, earnings show

Second-quarter earnings reports from three of the biggest U.S. banks on Friday showed the sector is benefiting from policy changes in Washington that have lowered their taxes, boosted interest rates and allowed them to buy back more stock.

Investors were skeptical, worried that underlying businesses were not as strong as they could be and that tough talk from international leaders about trade tariffs and hardened borders could hurt their bottom lines.

JPMorgan Chase, Citigroup and Wells Fargo reported second-quarter results.

Wells Fargo was the only one of the three lenders whose profit did not meet Wall Street expectations. The scandal-plagued bank was hurt by costs relating to past misconduct and a decline in mortgage lending.

Net income applicable to common stock fell to $4.79 billion, or 98 cents per share, in the second quarter, from $5.45 billion, or $1.08 per share a year ago.

Although Citigroup beat profit estimates, its revenue fell short of expectations. Overall, revenue rose about 2 percent to $18.47 billion but came in slightly below the average expectation of $18.51 billion.

Citigroup’s loan growth said little about the U.S. economy because it came largely from corporations looking for international trade loans and working capital financing, as well as from private banking clients in Asia, Chief Financial Officer John Gerspach told reporters.

JPMorgan, the largest U.S. bank by assets, had the strongest results, with profit jumping 18 percent year-over-year on strong trading revenue and loan growth. But chief executive Jamie Dimon warned that clients are worried about a global trade war after President Trump ramped up his protectionist rhetoric in recent weeks.

Trade disputes, particularly with China, are creating uncertainty, Dimon said on a conference call with reporters.

Citigroup CEO Michael Corbat acknowledged trade concerns but said, so far, they had not resulted in significant changes to the way clients transact.

Both JPMorgan and Citigroup benefited from strong equities trading during the quarter — JPMorgan’s equity trading revenue increased by 24 percent while Citi’s equity trading revenue was up 19 percent. That bodes well for Bank of America, Goldman Sachs and Morgan Stanley, each of which have substantial equities trading operations and are due to report quarterly earnings next week.

— Reuters

RESTAURANTS
Papa John's removes founder's image

Papa John’s Pizza, which has featured founder John Schnatter as the face of the company in logos and TV ads, is pulling his image from its marketing after reports he used a racial slur. 

His face was off at least some materials by late morning Friday, although the company said the details and exact timing for everything were still being worked out. The pizza chain said there are no plans to change its name.

Schnatter is still on the board and is the company’s largest shareholder — meaning he remains a key presence. Papa John’s has acknowledged in regulatory filings that Schnatter’s public role as its pitchman could be a liability if his reputation was damaged. The company got a taste of that last year, when Schnatter stepped down as chief executive after blaming disappointing pizza sales on the outcry surrounding football players kneeling during the national anthem.

This week, Papa John’s was already trying to further publicly distance itself from Schnatter after Forbes reported he used the n-word during a conference call in May. Schnatter apologized and said he would resign as chairman.

In addition to appearing in TV ads, Schnatter’s image has been on packaging and at the center of a logo that usually was all over the website of the Louisville-based company.

— Associated Press

ALSO IN BUSINESS

The Commerce Department has lifted the ban on American firms selling products to the Chinese telecommunications giant ZTE, removing the final hurdle for the company to start rebuilding its business. The ban was removed after ZTE paid the final tranche of a $1.4 billion penalty by placing $400 million in escrow at a U.S. bank, the department said in an emailed statement Friday. That sum comes in addition to $892 million in penalties ZTE has paid to the U.S. government after pleading guilty for violating sanctions, it said.

— Bloomberg News