Bank Earnings Defy Crisis, Impress Investors and Puzzle Analysts.

US banks, including JPMorgan Chase, Wells Fargo, Citigroup, and PNC, reported surging revenue and profits in Q1 2023, with executives assuring investors that the worst of the financial crisis was over. However, the industry still faces challenges, including the effect of higher interest rates on net interest income, which could begin to fall across the industry as smaller institutions pay more aggressively for deposits. Additionally, credit conditions could worsen, with JPMorgan and Wells Fargo increasing their provisions for credit losses, and Citigroup's CEO warning that recent industry turmoil could cause credit to contract, potentially leading to a shallow recession.