Finance & Economics

JPMorgan Profit Exceeds Estimates

JPMorgan Chase on Friday, April 12, released information on profit and revenue in the first quarter of the current year.

JPMorgan Profit Exceeds Estimates

The mentioned data from one of the largest financial institutions in the United States exceeded Wall Street expectations. The bank’s credit costs did not match the forecasts in a positive sense. Also, the revenue of a financial institution is higher than experts expected.

The bank’s profit for the first quarter was fixed at $13.42 billion. This figure is 6% higher than the result for the first three months of 2023. To a large extent, the indicator for the last quarter is because JPMorgan took over the First Republic. The corresponding deal was implemented during the crisis in the regional segment of the American banking sector in 2023.

Earnings per share amounted to $4.44. It is worth noting that LSEG analysts predicted that this figure would be equal to $4.11. Earnings per share for the first quarter could have been 19 cents higher if not for a $725 million increase in FDIC fees covering costs related to the bankruptcies of regional creditors in 2023.

The revenue of the financial institution in the first three months of 2024 amounted to $42.55 billion. This indicator showed an increase of 8% year-on-year. It is worth noting that LSEG analysts had forecast the bank’s revenue for the first quarter at $41.85 billion. This indicator increased mainly as a result of the fact that the financial institution received a higher interest income, which was facilitated by high interest rates and large loan balances.

The bank’s outlook for 2024 contains a forecast that net interest income in the current year will amount to about $90 billion. The mentioned expectations of the financial institution have not changed much compared to the previous version of the assessment of the prospects of activity this year. At the same time, for investors, it seems that JPMorgan’s forecast for 2024 turned out to be disappointing. According to media reports, they expected the financial institution to raise the expected figure by $2-3 billion. Against the background of negative investor sentiment, the cost of the bank’s shares decreased by 4.8%.

Piper Sandler analyst Scott Siefers described the financial institution’s forecast for 2024 as ultraconservative.

JPMorgan posted a provision for credit losses of $1.88 billion in the second quarter of the current year. Analysts interviewed by the media expected this figure to be $2.7 billion.

The bank’s overall trading revenue in the first quarter decreased by 5% year-on-year, but the results for fixed income and equity operations exceeded experts’ forecasts by more than $100 million each, amounting to $5.3 billion and $2.7 billion, respectively.

JPMorgan CEO Jamie Dimon described the financial institution’s performance in the first three months of 2024 as strong in the consumer and institutional areas. He noted that the recovery of the United States economy contributes to these indicators. At the same time, Jamie Dimon said that the long-term prospects of the dynamic of the US economic system are still in the zone of the potential impact of uncertainty factors such as inflationary pressures and armed conflicts in different countries of the world.

Since the beginning of 2024, JPMorgan’s share price has increased by 15%. This indicator outperformed 3.9% ahead of the KBW banking index.

As we have reported earlier, JPMorgan CEO Hails US Power in Letter to Investors.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.