JP Morgan shares spike, then fall back after quarterly results
JP Morgan's first quarter financials blew past the Street's forecasts thanks to robust trading at its Corporate and Investment Banking arm.
Dow Jones I.A.
37,896.62
04:30 15/10/20
JP Morgan Chase & Co.
$183.63
07:45 19/04/24
JP Morgan boss Jamie Dimon highlighted the fact that core loans at the lender's consumer businesses were running at a double-digit pace, claiming to have outperformed the industry in deposit growth.
Dimon added: "US consumers and businesses are healthy overall and with pro-growth initiatives and improving collaboration between government and business, the U.S. economy can continue to improve."
Net revenues were 6% ahead on the first quarter of 2016 at $25.6bn (consensus: $24.9bn), driven by loan growth and higher interest rates, alongside a 17% jump in profits after tax to $6.448bn.
Non-interest expenses increased 9% to $15.02bn due to higher compensation and legal expenses, while provisions for credit losses fell 28% to $1.315bn.
Net reserve releases from the Wholesale portfolio were the main reason behind the latter.
All of the above drove a 22% rise in earnings per share for the quarter to $1.65 (consensus: $1.52).
Consumer and Community banking saw revenues slip 1% year-on-year to $10.97bn, but was more than offset by a 17% rise in revenues from Corporate and Investment Banking to $9.54bn, where net profits soared 64% to $3.24bn, although that was 6% lower from the prior quarter.
Within CCB loan growth clocked in at 11%, with deposits rising 11% to $623bn, despite which net income at the unit was down 20% year-on-year at $1.99bn.
Higher equity and debt underwriting fees - reflecting strong underlying issuance activity and share gains - were the main catalyst behind the 34% jump for Investment Banking revenues to $1.7bn.
In Commercial Banking revenues were 12% ahead to $2.02bn and saw an improvement of 4% to $3.1bn in Asset and Wealth Management.
As of 1409 GMT shares in the Wall Street giant were higher by 0.35% to $85.70 but off the roughly $86.86 hit immediately following the release of its quarterly update.