JPMorgan Chase $JPM, America’s largest bank kicked off the banking sector’s Q218 earnings season on Friday before the market opens with better than expected results, along with the other money center major bank Wells Fargo $WFC, Citigroup $C and PNC Financial $PNC.
JPMorgan Chase $JPM, America’s largest bank kicked off the banking sector’s Q218 earnings season on Friday before the market opens with better than expected results, along with the other money center major bank Wells Fargo $WFC, Citigroup $C and PNC Financial $PNC.
Earnings
Second-quarter profit of $8.32 billion. Earnings per share $2.29 ahead of $2.22 expected on revenue of $28.40 billion beating expected $27.745 billion.
JPMorgan Chase & Co NYSE: $JPM ·
Reaction: July 13, Premarket $106.85 + .63 (0.59%)
Segments
Trading
- Markets revenue rose 13 percent to $5.4 billion, ahead of analysts’ estimates by a half billion dollars. Analysts had expected bond and stock trading of $4.88 billion, according to FactSet.
- Bond trading generated $3.5 billion in revenue, compared to the $3.18 billion estimate, on strength across product lines and improved commodities revenue, J.P. Morgan said.
- Stock trading yielded $2 billion in revenue, compared to the $1.7 billion estimate, fueled by derivatives and prime brokerage results.
“We see good global economic growth, particularly in the U.S., where consumer and business sentiment is high,” CEO Dimon said. “Because of this broad growth and the strong underlying performance across each of our businesses, the company delivered record results this quarter. We also want to acknowledge that global competition is getting stronger.”
Lending
- Total loans rose 4 percent to $948.4 billion, ahead of analysts expectations for $944.5 billion.
- The firm’s yield on interest-earning assets, a highly-watched figure of profitability in the banking world, was 2.46 percentage points matching the expectations of analysts surveyed by FactSet. That was a 2 basis point decline from the first quarter, which is a potentially worrying trend for the industry.
In May, the bank said it had submitted an application to the Chinese securities regulator for a new majority-owned securities business there. Last month, J.P. Morgan, Berkshire Hathaway and Amazon announced that Harvard professor Atul Gawande would lead the healthcare startup.
Bank stocks jumped earlier in the year after the largest U.S. banks passed Fed stress tests and were allowed to raise dividends and share buybacks. The Fed as it raise rates is helping banks’ finances giving their earnings a boost. However auto and student loans overhang the banking and finance sectors.
- JPM CEO Jamie Dimon is also chairman of the Business Roundtable for the Trump administration.
Source: JPM, AlphaStreet
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