Jamie Dimon, chairman and CEO of JPMorgan Chase, speaking on CNBC’s “Squawk Box” during the World Economic Forum’s annual meeting in Davos, Switzerland, January 17, 2024.
Adam Galicia | CNBC
JPMorgan Chase Profits and revenues beat Wall Street estimates on Friday, with credit costs and trading revenues coming in better than expected.
Here’s what the company reported compared to estimates from analysts surveyed by LSEG, formerly known as Refinitiv:
- Profit: $4.44 per share, versus $4.11 expected
- Revenue: $42.55 billion, versus $41.85 billion expected
The bank said its first-quarter profit rose 6 percent to $13.42 billion, or $4.44 per share, from a year earlier, thanks to its crisis-era purchase of First Republic. regional banking performance last year. Earnings per share would have been 19 cents higher without a $725 million increase in the FDIC’s special assessment to cover costs related to last year’s bank failures.
Revenue climbed 8% to $42.55 billion as the bank generated more interest income thanks to higher rates and larger loan balances.
JPMorgan recorded a provision for credit losses of $1.88 billion in the quarter, well below the $2.7 billion expected by analysts. The provision was 17% lower than a year ago as the company released some loan loss reserves, rather than building them as it did a year earlier.
While trading revenues overall declined 5% from the prior year, fixed income and equity results beat analysts’ expectations by more than $100 million each, coming in at respectively $5.3 billion and $2.7 billion.
JPMorgan CEO Jamie Dimon called his company’s results “strong” in the consumer and institutional areas, helped by a still buoyant U.S. economy, while remaining cautious about the future.
“Many economic indicators remain favorable,” Mr. Dimon said. “However, looking ahead, we remain attentive to a number of important uncertain forces,” including overseas conflicts and inflationary pressures.
Although the largest U.S. bank by assets has managed the rate environment well since the Federal Reserve began raising rates two years ago, its smaller counterparts have seen their profits shrink.
The sector has been forced to pay out its deposits as clients shift their cash to higher-yielding instruments, reducing their margins. Concern is also growing over rising losses on commercial loans, particularly on office buildings and multifamily housing, and rising defaults on credit cards.
However, large banks are expected to outperform smaller ones this quarter.
JPMorgan shares have jumped 15% this year, outperforming the KBW banking index’s 3.9% gain.
Wells Fargo And Citi Group will also release its quarterly results on Friday, while Goldman Sachs, Bank of America And Morgan Stanley report next week.
This story is developing. Please check again for updates.
