JP Morgan reported a surge in profit in the first quarter boosted by a strong performance in its trading and investment banking divisions.
The Wall Street bank posted net income of $14.3bn in the first three months of the year, up from $2.9bn a year earlier. JP Morgan’s performance was driven by the release of $5.2bn set aside for bad loans.
Revenue jumped 14 per cent to $33.1bn in the three months to 31 March.
JP Morgan’s corporate and investment bank performed well with net income of $5.7bn, up $3.8bn, with net revenue jumping 46 per cent to $14.6bn. Banking revenue soared 70 per cent to $4.5bn while investment banking revenue jumped to $2.9bn, driven by higher fees.
Chief executive Jamie Dimon said consumer spending had returned to pre-pandemic levels, up 14 per cent compared to the first quarter of 2019.
The large US banks struggled at the onset of the pandemic but investors are now optimistic the economic recovery is on track due to President Joe Biden’s $2 trillion stimulus package and the rapid vaccine rollout.
“With all of the stimulus spending, potential infrastructure spending,
continued Quantitative Easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust, multi-year growth,” Dimon said.
“If all of the government programs are spent wisely and efficiently, focusing on actual outcomes, the benefits will be more widely shared, economic growth will be more sustainable and future problems, like inflation and too much debt, will be reduced.”