JPMorgan Chase today announced strong financial results that easily topped expectations for its Q2 2017 metrics, saying that it had seen strong loan growth and was also supported by higher interest rates.
The bank reported quarterly earnings of $1.82 per share on revenue of $26.4 billion. Analysts had expected earnings of $1.59 a share on about $25.4 billion in revenue, according to a consensus estimate from Thomson Reuters.
In addition, the company’s net income rose to $7.03 billion in the second quarter from $6.2 billion for the same time last year.
Higher rates boosted bank profits because net interest margins, the difference between the interest banks make in loans and what they pay out in interest to depositors, grew by 8 percent to $12.5 billion.
Nevertheless, shares of America’s biggest bank by assets ticked down 1.7 percent to $91.55 when the market opened following the results announcement.
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The decline came as the CFO told reporters: “Net interest income for the full year would increase by $4 billion, rather than a $4.5 billion estimate given in April.” The lender’s financial executive attributed the weak spots to mortgage adjustments and a change in the alignment of interest rates.
In a conference call with Wall Street analysts this morning, both Jamie Dimon and Marianne Lake, chairman/CEO and CFO of JPMorgan Chase respectively, said that they are still hopeful: “The US consumer remains healthy, evidenced in our strong underlying performance in Consumer & 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.”
But Dimon, who last year turned down Donald Trump’s offer to become treasury secretary, garnered the main focus after he unleashed a salvo of frustration on Washington DC bureaucrats.
JPMorgan’s second-quarter results were also hit by market activity, with its overall market-related trading revenue down 14 percent in the latest quarter to $3.22 billion, mostly due to fixed income trading.
In general, investors are closely watching JPMorgan’s results and those of other big banks reporting Friday, such as Wells Fargo and Citigroup, to get some indication of the strength of the economy and as their results will set the tone for the entire first-quarter earnings season.