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Our team at Novo is back with our third installment of our quarterly series, “Big Banks Make Big Small Business Profits.”
In analyzing Q2 2023 earnings from Bank of America, JP Morgan Chase, and Wells Fargo, we found that big banks continue to make extraordinary revenue from fees, while focusing very little attention on small businesses in their quarterly reporting.
Here are three key numbers to remember from the the big banks’ Q2 earning reports and recent banking news:
$1.6 billion: The amount banks profited off of small business and consumer service fees.
In Q1, JP Morgan Chase, Wells Fargo, and Bank of America reported a combined $1.6 billion in small business and consumer service fees. In Q2, they raked in an additional $1.6 billion, or $3.2 billion for the first half of 2023. When you consider the average small business owner makes $71,813 a year, the $3.2 billion in service fees is equal to the average earnings of more than 40,000 small business owners.
Zero: The number of times Bank of America mentioned small businesses on their earnings call.
After conducting an analysis of the Q2 earnings calls of major banks, Novo found again that they rarely if ever mention small businesses. Wells Fargo mentioned small businesses twice, Chase once, and Bank of America didn’t say “small business” at all.
$250 million: Bank of America’s penalties for fake accounts and illegal fees.
Soon after the end of the second quarter, the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency, announced that Bank of America had to pay $150 million in punitive fines, and $100 million to customers who were impacted by the bank double-dipping on insufficient funds fees, withholding credit card rewards, and opening new accounts using customer information without their knowledge or consent. Whether intentional or accidental, these incidents and the CFPB’s ongoing campaign against “junk fees” point to an uncomfortable truth: big banks are often systemically incentivized against transparency. They leverage financial anxiety and hardship to extract fees and sow more confusion, rather than support customers in managing funds responsibly and building wealth.
At Novo, we’re laser-focused on the needs of our customers — small businesses, sole proprietors, side hustlers, and freelancers. We succeed when our customers grow, not when they’re paying sizable service fees.
Switch to Novo big bank today and receive $100 for your first $1000 spent. Terms and conditions apply. Visit www.novo.co/switch to learn more.
Based on information from @Chase 2023 2Q Earnings Supplement, Page 12
@BankofAmerica 2023 2Q Earnings Supplement, Page 11
@WellsFargo 2023 2Q Earnings Supplement, Page 12
Chase 2023 2Q Earnings Call Transcript via Motley Fool
Bank of America 2023 2Q Earnings Call Transcript via Seeking Alpha
Wells Fargo 2023 2Q Earnings Call Transcript via Motley Fool
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