JPMorgan’s profits more than double despite the slowdown in trade

JPMorgan Chase & Co reported a 155% increase in profits on Tuesday, boosted by the release of loss reserves and an increase in dealmaking, although the largest US bank dealt with a sharp slowdown in trading activity from last year’s record highs.

The Wall Street behemoth, whose fortunes tend to reflect the health of the U.S. economy, released an additional $ 3 billion from the funds it had set aside last year in anticipation of a wave of defaulted pandemic loans.

However, its trading business took a hit as the financial markets calmed down after last year’s unprecedented volatility. The bank’s income from commercial and investment banks fell by 19%, mainly due to a fall in bond trading.

Analysts have pointed out that the level of trading activity witnessed last year was unsustainable.

Total trading revenue fell 28% to 8.1 billion. $, As bond trading fell 44% from last year. The stock markets were a bright spot with a turnover of 13%.

JPMorgan’s consumer bank, which has been hurt by low interest rates, reported an 8% drop in net interest income – the difference between what the bank earns on loans and pays out on deposits.

JPMorgan's profits more than double despite the slowdown in trading

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While average loans in JPMorgan’s consumer and community banking unit fell 12%, there were signs that spending was jumping back. Combined debt and credit card spending increased by 22% in the quarter compared to the same period in 2019, which is considered more reflective of normal spending patterns than last year’s quarter.

“While interest rates and loan growth continue to be headwinds in general, there are clear signs that the economy continues to improve,” wrote Evercore ISI analyst Glenn Schorr, noting the rise in credit card spending and client investment activity.

The broader interest rate environment is expected to improve this year as the economy continues to recover, which is likely to bend large lenders such as JPMorgan and Bank of America.

JPMorgan’s shares were less than 1% trading before opening time.


Despite the decline in trading, overall Wall Street banking remained strong in the first half of the year driven by a record volume of large trades. Investment bank income increased to DKK 3.4 billion. $, As fees increased 25%.

The capital markets also remained active, and an increase in IPOs offset more than a slowdown in trades made through specialty acquisition companies (SPACs).

Goldman Sachs, Wall Street’s leading investment bank, jumped past analysts’ estimates for second-quarter profits as Wall Street’s largest investment bank also capitalized on a global dealmaking activity.

JPMorgan’s net income rose to $ 11.9 billion. $ Or $ 3.78 per. Share in the quarter ended June 30, from 4.7 billion. Dollars or $ 1.38 per. Share a year earlier. However, revenue fell 7% to $ 31.4 billion.

Analysts had, on average, expected earnings of $ 3.21 per share. Stock, according to Refinitive.

“This quarter, we have once again benefited from a significant reserve release as the environment continues to improve, but as we have said before, we do not consider these core or recurring profits,” said JPMorgan CEO Jamie Dimon.

In addition to the boost from reserve releases, JPMorgan’s quarterly net worth came in at $ 9.6 billion.

Last year, banks were forced to set aside billions for possible defaulted loans. But accommodating monetary policy and stimulus control kept the U.S. consumer healthier than originally feared, allowing banks to free up more of their reserve capital.

Widespread vaccinations have led to large parts of the United States easing pandemic restrictions and thus creating a broader economic recovery.

(Reporting by Anirban Sen in Bengaluru and Elizabeth Dilts in New York; editing by Saumyadeb Chakrabarty)

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