JPMorgan Chase has once again reported a strong quarter, with CEO Jamie Dimon cautioning about the various risks the bank continues to monitor closely.
The largest U.S. bank by assets recorded a net income of $18.1 billion, or $6.12 per share, marking a 25% increase from $14.5 billion in the previous year’s same period. This exceeded Wall Street analysts’ predictions of $17.3 billion in profit, or $5.88 earnings per share, according to FactSet.
In the second-quarter earnings report released Friday, JPMorgan revealed $50.2 billion in revenue for the three months ending June 30, which significantly surpassed the $42.23 billion expected by analysts based on FactSet data.
Several high-performing areas contributed to the bank’s strong showing. Investment banking fees surged by 50%, and the bank’s market share increased to 9.5%. Additionally, there was a $7.9 billion gain from new Visa shares.
Despite the robust performance, CEO Dimon reiterated concerns about geopolitical and macroeconomic uncertainties.
“While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks,” Dimon stated. “These tail risks include a complex geopolitical situation, potentially the most dangerous since World War II, whose outcome and impact on the global economy remain uncertain.”
He added, “There has been some progress in reducing inflation, but numerous inflationary forces persist, such as large fiscal deficits, infrastructure needs, restructuring of trade, and global rearmament. As a result, inflation and interest rates may stay higher than the market expects. Additionally, the full effects of large-scale quantitative tightening are still unknown.”
Shares of JPMorgan dipped by 1% in pre-market trading on Friday, likely due to its net interest income falling short of analyst expectations and an increase in its provision for loan losses.
Despite concerns, JPMorgan seems well-positioned to handle prolonged higher interest rates, which are expected to remain in the 5.25-5.5% range for the next few months. The bank reported a net interest income of $22.9 billion, a 4% increase from the previous year.
As of June 30, JPMorgan managed $3.7 trillion in assets, a 15% year-over-year increase, widening the gap between itself and other major U.S. banks. Last year was the bank’s most profitable to date, with $49.6 billion in profits, including a $4.1 billion gain from its acquisition of the failed First Republic Bank in May 2023.
This quarter marks the first time JPMorgan has reported full results without separating First Republic’s contributions, making comparisons to the previous year straightforward.
In late June, JPMorgan announced plans to increase its quarterly common stock dividend from $1.15 to $1.25 per share for the third quarter of 2024. The board also approved a new $30 billion common share repurchase program, which began on July 1. Dimon stated that the dividend increase is supported by JPMorgan’s strong financial performance and represents a sustainable level of dividends.
The bank reported having a capital ratio of 15.3%, preparing itself with excess capital for potential new requirements that could be implemented by mid-2025. Following the Federal Reserve’s annual bank stress test results, JPMorgan indicated it could face higher losses than projected by the central bank, leading to a modest increase in the capital ratio requirement from 11.9% to 12.3%.