JP Morgan Chase announced its first-quarter results on Tuesday, with better-than-expected fixed income revenue and better-than-expected investment banking revenue.
Here’s what the company reported:
Earnings: $5.94 per share (LSEG estimate of $5.45) Revenue: $50.54 billion vs. LSEG estimate of $49.17 billion
The company said net income rose 13% to $16.49 billion, or $5.94 per share. Sales increased 10% to $50.54 billion.
The bank’s fixed income trading revenue rose 21% to $7.08 billion, about $370 million more than Street accounts expected, due to increased activity in commodities, credit, currencies and emerging markets.
Investment banking fees rose 28% to $2.88 billion, about $260 million more than expected, due to higher merger advisory fees and equity underwriting fees.
Another factor in the bank’s highest quarterly forecast is that it had less money set aside for loan losses than analysts expected.
The company’s allowance for credit losses was $2.5 billion, about $500 million less than street accounts expected, indicating the continued strength of JPMorgan’s borrowers. Specifically, the company released $139 million in consumer reserves during the quarter, while business reserves increased by $327 million. A year ago, the company’s reserves were $3.3 billion.
“A complex set of risks”
Banks have enjoyed tailwinds in recent quarters, from a recovery in investment banking and trading activity to stabilization in consumer credit. Bank trading desks, which match buyers and sellers of securities and provide the funds to make trades, are taking advantage of the period’s volatility, while more corporate clients are planning mergers to improve their prospects.
JPMorgan, the nation’s largest company by assets and the world’s largest by market capitalization, has held up on both Wall Street and Main Street, with its CFO declaring last year that it was “all in.”
But this year, markets have been roiled by disruptions from the latest artificial intelligence models, risks posed by private credit and worries about the Iran war that began in late February.
JPMorgan Chief Executive Jamie Dimon said in a statement Tuesday that the U.S. economy was resilient in the first quarter thanks to consumer and business spending and debt repayments, but uncertainty is rising.
“The set of risks is becoming increasingly complex, including geopolitical tensions and wars, energy price volatility, trade uncertainty, large global budget deficits, and soaring asset prices,” Dimon said.
“While we cannot predict how these risks and uncertainties will ultimately develop, they are important and support why we are preparing for a wide range of environments,” he said.
Notably, the bank lowered its forecast for full-year net interest income, the main driver of bank profits, to about $103 billion from $104.5 billion previously.
goldman sachsThe trading and investment banking rival to JPMorgan on Monday reported first-quarter results that beat expectations on record equity trading revenue.
citygroup and wells fargo The results will be announced on Tuesday, but bank of america and morgan stanley I will report on Wednesday.
