JPMorgan Tops Q2 Revenue Expectations

The company surpassed both top and bottom-line forecasts, with revenue increasing by 20% to $50.99 billion, compared to the $49.87 billion estimate. This growth was driven by better-than-expected investment banking fees and equities trading results.

The bank’s earnings rose by 25% from the previous year to $18.15 billion, or $6.12 per share. Adjusted earnings per share were $4.26, above the $4.19 estimate.

The Visa transaction contributed $7.9 billion to the second-quarter profit.

CEO Jamie Dimon highlighted potential future risks, including higher-than-expected inflation and interest rates, stating, “The geopolitical situation remains complex and potentially the most dangerous since World War II.”

Record Profit

Investment banking fees increased to $2.4 billion, surpassing the firm’s forecast last month. Equities trading revenue jumped 21% to $3 billion, exceeding estimates by $230 million due to strong derivatives performance. Fixed-income trading rose 5% to $4.8 billion, aligning with expectations.

The bank set aside $3.05 billion for credit losses, above the $2.78 billion estimate, indicating an expectation of increased borrower defaults. Net interest income (NII), the difference between what banks earn on assets and what they pay on liabilities, reached a record high last year at the four largest lenders, driven by rising interest rates.

CEO Jamie Dimon reiterated that interest rates could remain higher than some economists predict. JPMorgan Chase maintained its forecast of approximately $91 billion in NII for this year, having increased this guidance in May based on the expectation that the Federal Reserve will lower interest rates more slowly than previously anticipated.

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Alternatively, traders can short JPMorgan using our -1x JPMorgan.

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