Anamika Dey, editor
Brief news
- JPMorgan Chase announced second-quarter profit and revenue that exceeded analysts’ expectations.
- Investment banking fees increased by 52% from the previous year.
- The bank’s CEO expressed caution about potential future risks, such as higher inflation and interest rates.
Detailed news
On Friday, JPMorgan Chase announced second-quarter profit and revenue that surpassed analysts’ expectations. Investment banking fees increased by 52% from the previous year.
The organisation disclosed the following:
Adjusted earnings per share came in at $4.26, surpassing the estimated $4.19 according to analysts surveyed by LSEG.
Earnings: $4.26 per share adjusted, compared to the $4.19 estimate of analysts surveyed by LSEG Revenue: $50.99 billion, compared to the $49.87 billion estimate
The bank reported that earnings increased by 25% from the previous year to $18.15 billion, or $6.12 per share. The bank’s profit per share was $4.26, excluding items associated with its stake in Visa.
The consensus estimate of analysts surveyed by LSEG was surpassed by revenue, which increased by 20% to $50.99 billion. This increase was facilitated by better-than-expected equities trading results and investment banking commissions.
The release from CEO Jamie Dimon stated that his firm was cautious about potential future risks, such as higher-than-expected inflation and interest rates, despite the fact that stock and bond valuations presently “showcased a rather positive financial outlook.”
Dimon stated, “The geopolitical situation is still intricate and conceivably the most perilous since World War II, although its outcome and impact on the global economy are as yet unknown.” “While there has been some progress in reducing inflation, there are still numerous escalating factors that must be addressed, including infrastructure needs, large fiscal deficits, trade restructuring, and the mobilization of the troops in the world.”
JPMorgan’s shares lost 1% in premarket trading.
A rebound in Wall Street activity, particularly on the advisory side, was anticipated to benefit banks this quarter, and JPMorgan’s results confirm this.
JPMorgan’s investment banking fees totaled $2.3 billion, surpassing the StreetAccount estimate by approximately $300 million.
The equities trading revenue increased by 21% to $3 billion, surpassing the estimate by $230 million, as a consequence of robust derivatives results. The estimate was matched, as fixed income trading increased by 5% to $4.8 billion.
The bank’s provision for credit losses in the quarter was $3.05 billion, which exceeded the estimated amount of $2.78 billion. This suggests that the bank anticipates an increase in loan defaults in the future.
Octavio Marenzi, CEO of consulting firm Opimas, stated, “JPMorgan has successfully navigated a challenging interest rate environment.”
Nevertheless, Marenzi observed that Main Street banking is beginning to falter, despite the fact that banking and equities trading contributed to the company’s performance. “JPMorgan anticipates a challenging period in the US economy, as evidenced by the substantial increase in credit loss provisions.”
In the morning trading session, JPMorgan’s shares experienced a 2% decline.
Source : CNBC News
