JPMorgan Chase has reported another strong quarter, with chief executive Jamie Dimon emphasizing the bank’s vigilance regarding various risks.
The largest bank in the U.S. 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 quarter last year. This exceed analysts’ expectations, who had projected $17.3 billion in profit, or $5.88 per share, according to FactSet.
The bank also reported $50.2 billion in revenue for the three months ending June 30, surpassing the $42.23 billion forecasted by analysts. Several segments outperformed, boosting the bank’s overall results significantly. Investment banking fees soared by 50%, and its market share rose to 9.5%. Additionally, the bank gained $7.9 billion from new Visa shares.
Despite these achievements, CEO Dimon reiterated concerns about geopolitical and macroeconomic challenges. He noted that market valuations and credit spreads appear optimistic, but the bank remains wary of potential risks. Dimon highlighted the complexity of the geopolitical landscape, comparing it to the most dangerous period since World War II, with uncertain outcomes impacting the global economy. He also mentioned persistent inflationary pressures due to factors such as large fiscal deficits and global trade restructuring, suggesting that inflation and interest rates might remain elevated longer than anticipated. Furthermore, Dimon cautioned about the unknown effects of large-scale quantitative tightening.
JPMorgan shares fell by 1% in pre-market trading on Friday, likely due to net interest income falling short of expectations and an increase in its provision for loan losses. Despite this, there is little concern about the bank’s ability to handle higher interest rates. The bank reported a net interest income of $22.9 billion, a 4% increase year-over-year.
With $3.7 trillion in assets under management as of June 30, a 15% year-over-year increase, JPMorgan continues to widen its lead over other U.S. banking giants. Last year was its best ever, 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 is the first quarter JPMorgan is reporting full results without isolating First Republic’s contributions, as comparisons can now be made to the previous year. Late last month, the bank announced plans to raise its quarterly common stock dividend to $1.25 per share from $1.15, effective in the third quarter of 2024. The board also authorized a $30 billion stock repurchase program starting July 1. Dimon said the dividend increase is backed by the bank’s robust 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 that may take effect by mid-2025. Following the Federal Reserve’s yearly bank stress test, JPMorgan suggested it could face higher losses than disclosed by the central bank, leading to a likely modest increase in the capital ratio requirement to 12.3% from the current 11.9%.