JPMorgan Chase announced another robust quarter, with CEO Jamie Dimon continuing to caution about various risks the bank remains alert to.
The largest U.S. bank by assets reported a net income of $18.1 billion, or $6.12 per share, marking a 25% increase from $14.5 billion a year ago, according to its second-quarter earnings release on Friday. Wall Street analysts had estimated a profit of $17.3 billion, or $5.88 per share, based on FactSet data.
The bank recorded $50.2 billion in revenue for the three months ending June 30, significantly surpassing the $42.23 billion expected by analysts, also according to FactSet.
Several key segments of the global bank performed exceptionally well, contributing to its impressive gains. Investment banking fees surged by 50%, and its market share increased to 9.5%. Additionally, the bank enjoyed a $7.9 billion boost from new Visa shares.
Despite the solid performance, CEO Dimon reiterated warnings about geopolitical and macroeconomic risks.
“While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks,” he stated. “These tail risks are the same ones that we have mentioned before. The geopolitical situation remains complex and potentially the most dangerous since World War II, though its outcome and effect on the global economy remain unknown.”
He added, “There has been some progress in reducing inflation, but several inflationary forces persist: large fiscal deficits, infrastructure needs, trade restructuring, and global re-militarization. Consequently, inflation and interest rates may stay higher than the market anticipates. Finally, we still do not know the full effects of quantitative tightening on this scale.”
JPMorgan’s shares fell 1% in pre-market trading on Friday, potentially due to its net interest income being below analyst expectations and an increase in its provision for loan losses.
Concerns about the bank’s resilience to prolonged higher interest rates appear minimal, which are expected to remain in the 5.25-5.5% range for the next few months as the central bank plans its likely sole rate cut of the year. JPMorgan reported a net interest income of $22.9 billion, reflecting a 4% increase year-over-year.
With $3.7 trillion assets under management as of June 30, marking a 15% year-over-year increase, the bank has further distanced itself from other U.S. banking giants. It achieved its best-ever year last year, with $49.6 billion in profits, including a $4.1 billion gain from acquiring the failed First Republic Bank in May 2023.
This quarter marks the first time JPMorgan is reporting its full results without separately noting First Republic’s contributions, as comparisons are now valid from a year prior.
Late last month, JPMorgan revealed plans to raise its quarterly common stock dividend to $1.25 per share, up from $1.15 per share, for the third quarter of 2024. The board also authorized a new $30 billion common share repurchase program starting July 1. Dimon attributed the dividend increase to JPMorgan’s “strong financial performance, representing a sustainable level of dividends.”
The bank reported a capital ratio of 15.3%, securing itself with excess capital in light of potential new capital requirements anticipated by mid-2025. Following the Federal Reserve’s annual bank stress test results, JPMorgan recognized it might face higher losses than disclosed by the central bank. As a result, it suggested the capital ratio requirement for banks “would likely be modestly higher,” rising to 12.3% from the current 11.9%.