NEW YORK, Jan 14 (Reuters Breakingviews) - Big American banks are on a roll. JPMorgan (JPM.N) and Citigroup (C.N) on Friday reported record full-year earnings for 2021. Wells Fargo might have too, had regulators not forced it to shrink. Customers and financial markets were exceptionally cooperative in 2021 and will probably continue to be so in 2022. But after a period playing on the same side, the lenders’ chief problem is now each other. External factors are turning their way. Take the Federal Reserve"s turn towards higher interest rates. JPMorgan made $5 billion less in net interest last year than it did in 2019. Wells Fargo was down by over $11 billion. The three rate hikes the Fed now expects in 2022 will help turn that around. Less than half of JPMorgan’s deposits are tied up in loans, so there’s room to invest much more as yields rise. JPMorgan has $714 billion sitting on deposit with other banks. Customers are also becoming less cautious read more as the pandemic recedes. JPMorgan’s credit card balances are finally back to where they were at the end of March 2020. Its loans grew 6% over the year, though around half of that came from lending to rich wealth-management clients. Wells Fargo boss Charlie Scharf told a conference in December that he reckons customers have around 35% more in their accounts than before the emergence of Covid-19. That all means banks can be banks again. That"s good for their profit numbers, with two caveats. First, the earnings updraft read more from trading and investment banking is weakening. JPMorgan’s equities and fixed income revenue made up less than one-fifth of the total in the fourth quarter, the least since 2019, as bond trading dropped off. Citigroup saw a similar return to pre-pandemic levels. Second, some of the gains from interest income will get eaten up by increased competition. The bank run by Jamie Dimon warned that spending on marketing, including credit card promotions, will go up, as will pay read more . No wonder: the big banks are all well capitalized and keen to expand in businesses like payments where relatively young rivals are hyperactive. Investors seem to be somewhere between confident and complacent. JPMorgan, with a market value of nearly $500 billion, trades at almost twice its book value – a threshold it hasn’t breached in two decades. Bank of America (BAC.N) and even the scandal-prone Wells Fargo saw their valuations rise in 2021. That reflects the battles won, but perhaps not the fights to come. Follow @johnsfoley on Twitter CONTEXT NEWS - JPMorgan on Jan. 14 reported fourth-quarter revenue on a managed basis of $30.3 billion, beating analyst estimates of $29.9 billion, according to Refinitiv. - The U.S. lender made $9.9 billion of earnings applicable to common shareholders, boosted by a $1.8 billion pre-tax reversal of profit set aside to cover bad debts, mostly from its credit card business. - What JPMorgan calls managed revenue strips out the effect of tax perks that come with certain kinds of activities to make them comparable with taxable securities and investment. - Wells Fargo the same day reported fourth-quarter revenue of $20.9 billion, compared with analyst estimates of $18.9 billion, boosted by the sale of a business and gains in its private equity unit. - Citigroup also reported fourth-quarter financial results. Its revenue for the period was $17 billion, up from $16.8 billion for the fourth quarter of 2020.