JPMorgan Chase earns $4.7 billion in the quarter, sets aside another $8.9 billion for credit losses

Jamie Dimon, chief government officer of JPMorgan Chase & Co.

Giulia Marchi | Bloomberg | Getty Images

JPMorgan Chase reported second quarter earnings. 

Here’s how JPMorgan did:

Earnings: $1.38 a share, though it is not instantly clear how that compares with the $1.04 per share estimate of analysts surveyed by Refinitiv.

Revenue: $33 billion, in contrast with the $30.3 billion estimate.

JPMorgan, the greatest U.S. financial institution by belongings, can be the first main lender to report earnings. The firm will likely be intently watched for clues on how the coronavirus pandemic is impacting banks’ retail and institutional companies.

The key query traders have is whether or not the second quarter will signify the nadir for financial institution income this yr: Big banks are anticipated to indicate the largest mortgage loss provision for any quarter since the monetary disaster due to the pandemic, in response to analyst Jason Goldberg of Barclays.

The destiny of the trade is tied intently to the path of the coronavirus as a result of the unemployment brought on by states shutting down their economies impacts the talents of shoppers to repay money owed.

JPMorgan CEO Jamie Dimon mentioned in May that the odds had been “pretty good” that the economic system would rebound in the second half of the yr, pushed by the reopening. But that state of affairs could possibly be threatened by the latest development of the coronavirus, which has already compelled some states to reverse course and shutter companies once more.

A vivid spot for the trade has been buying and selling, which has benefited from surging volatility and the Federal Reserve’s unprecedented actions to prop up credit markets. At JPMorgan, the financial institution’s buying and selling division was headed for a income enhance of greater than 50% in contrast with the yr earlier, co-President Daniel Pinto mentioned in late May.

While financial institution shares have rebounded from their March lows, they’ve underperformed the broader indices, which have been buoyed by the roaring know-how sector.

One issue protecting financial institution shares down: Low rates of interest have pressured web curiosity margin, a key measure of profitability in the banking sector. The trade’s mortgage books have additionally begun to shrink, pushed in half by decrease credit-card utilization and the concern of rising defaults.

This story is creating. Please examine again for updates.

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