JP Morgan Chase smashes expectations despite low volatility hitting trading revenues

 
William Turvill
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FILE PHOTO: JP Morgan Chase Posts 36 Percent Increase In Q2 ProfitsBear Stearns
Chief executive Jamie Dimon said the firm had posted "very solid results against a stable-to-improving global economic backdrop" (Source: Getty)

US bank JP Morgan Chase smashed analyst estimates with its second quarter results today, despite its trading revenues suffering from low volatility.

The figures

The Wall Street giant reported revenues of $26.4bn for the three months to June, ahead of a consensus forecast of $25bn and up from $25.2bn in the same period last year.

Profit, or net income, came in at $7bn, up from $6.2bn in the same quarter last year. And earnings per share were reported at $1.82, ahead of the $1.58 anticipated, and $1.55 in the second quarter of 2016.

JP Morgan boasted that it had retained its number one ranking for global investment banking fees, with a wallet share of 8.3 per cent so far this year.

Why it’s interesting

JP Morgan is the first of the big US banks to report its second quarter results. Analysts had anticipated earnings being marginally up and revenues down one per cent.

Speaking at the end of May, JP Morgan finance chief Marianne Lake told investors: “As a sweeping generalisation, low rates, a more cautious outlook on rates, and low volatility have led to low client flows and a generally quiet, subdued and challenging trading environment.”

The results showed that trading revenue was down, 14 per cent to $4.8bn. But the bank performed well in lending, with turnover up 35 per cent to $373m.

What JP Morgan Chase said

Chief executive Jamie Dimon said:

We continued to post very solid results against a stable-to-improving global economic backdrop.

The US consumer remains healthy, evidenced in our strong underlying performance in consumer and community banking.

Loans and deposits continue to grow strongly, and card sales and merchant processing volumes were up double digits, reflecting our consistent investment in the business.

In the corporate and investment bank, we maintained our leadership in banking, while markets revenue was down amid lower volatility and client activity.

Read more: What to expect from US bank second quarter earnings figures

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