Net income is improving thanks to better credit quality, and revenue is weak because the economy is in the tank.
Yes, in each case, we saw decent numbers on the bottom line, largely thanks to improving credit quality and lower charge-offs. That’s all well and good.
But the business of banking is still ugly, because there isn’t actually that much real world economic activity to facilitate and lend into.
That’s why all those same banks that are doing fine on the bottom line are producing pretty weak numbers on the top line.
Hence, as David Goldman pointed out yesterday, the business of banks is still just buying more government Treasuries, which are earning less and less.