JPMorgan Chase posted another strong quarter, but CEO Jamie Dimon reiterated warnings about various risks the bank remains vigilant of.
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 in the same period the previous year. This surpassed Wall Street analysts’ estimates of $17.3 billion in profit, or $5.88 per share, according to FactSet.
In the three months ending June 30, the bank reported $50.2 billion in revenue, exceeding analysts’ expectations of $42.23 billion, per FactSet.
JPMorgan surpassed expectations in several areas, receiving a strong boost from a 50% rise in investment banking fees and a 9.5% market share increase. The bank also gained $7.9 billion from new Visa shares.
Despite the robust performance, CEO Dimon reiterated warnings about geopolitical and macroeconomic risks. He emphasized market valuations and credit spreads reflect a seemingly benign economic outlook, but the bank remains cautious about potential tail risks. He highlighted the complexity and potential danger of the current geopolitical situation, reminiscent of World War II, and the uncertainty surrounding its impact on the global economy.
Dimon pointed out ongoing inflationary pressures, stemming from factors like large fiscal deficits, infrastructure needs, trade restructuring, and remilitarization. He noted inflation and interest rates might remain elevated beyond market expectations. Additionally, he mentioned the unknown effects of large-scale quantitative tightening.
JPMorgan shares dropped 1% in pre-market trading on Friday, likely due to net interest income falling short of analyst expectations and an increase in its provision for loan losses.
Concerns about the bank’s resilience amid prolonged high interest rates appear minimal. JPMorgan reported a net interest income of $22.9 billion, a 4% annual increase.
As of June 30, the bank managed $3.7 trillion in assets, a 15% year-over-year increase, further widening its lead over other major U.S. banks. The bank had its best year ever 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 separating First Republic’s contributions, making comparisons to the previous year possible.
In late June, JPMorgan announced plans to raise its quarterly common stock dividend to $1.25 per share from $1.15 per share for the third quarter of 2024. The board of directors also approved a new $30 billion common share repurchase program that 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 a capital ratio of 15.3%, maintaining excess capital in anticipation of potential new capital requirements by mid-2025. Following the results of the Federal Reserve’s annual bank stress test, JPMorgan noted it might face higher losses than projected by the central bank. Consequently, the capital ratio requirement could modestly increase to 12.3% from the current 11.9%.