Trump bump: JP Morgan earnings smash it again as investment banking takes off

Emma Haslett
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JP Morgan smashed expectations (Source: Getty)

Say what you like about Donald Trump, but investment banks are having a field day: JP Morgan reported earnings way above expectation today, as it cashed in on the so-called Trump bump.

The figures

The lender said reported revenues rose to $24.7bn in its first quarter, up 6.5 per cent from the same period last year and 5.5 per cent on the previous quarter.

Net income rose 17 per cent to $6.5bn, while earnings per share rose 22 per cent to $1.65, well above the $1.52 analysts had expected.

However, its impressive performance didn't stretch to its retail banking operation, where income dipped 20 per cent to $1.99bn, from $2.49bn during the same period last year. That was offset by its corporate and investment bank, where income rose 63.8 per cent to $3.24bn.

Investors were suitably impressed: shares rose 1.2 per cent to $86.45 in pre-market trading.

Read more: Investment banking fees rocket to 10-year high, boosted by M&A and Trump

Why it's interesting

As Trump's tweets sent markets flying, the US' investment banks have been cashing in: JP Morgan's investment banking arm put in a stellar performance, today's results showed.

The lender isn't the only one to benefit: figures published earlier this month showed global investment banking fees have rocketed to a 10-year high thanks to a raft of big M&A deals, as well as the Trump bump.

But its retail banking arm is still JP Morgan's largest business, and with revenues in mortgage banking falling 18 per cent to $1.53bn, America may not be Great Again just yet.

Analysts hoping for clues as to how lenders feel about Trump's new regulation-lite environment may be disappointed, though.

Jamie Dimon, the bank's chief executive, was tight-lipped, saying only that "with pro-growth initiatives and improving collaboration between government and business, the US economy can continue to improve".

Read more: Donald Trump says he's planning a haircut for Dodd-Frank

What JP Morgan said

Dimon added:

We are off to a good start for the year with all of our businesses performing well and building on their momentum from last year. The consumer businesses continue to grow core loans at double digits, outperform the industry in deposit growth, and we once again had very strong card sales volume growth this quarter – reflecting our commitment to providing our customers the innovative products and services they want.

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