JPMorgan saw record revenue and profits jump 52% to $12.62 billion thanks to higher interest rates – but CEO Jamie Dimon warns that ‘storm clouds are still looming’
- JPMorgan announced Friday that its quarterly profit jumped 52% to $12.62 billion.
- The largest US bank withstood the banking crisis that gripped the financial sector
- CEO Jaime Dimon warned that storm clouds “still loom large” for the economy
JPMorgan Chase’s revenue jumped to a record in the first quarter as rising interest rates boosted its consumer business and it remained the largest US lender resilient through the banking crisis.
JPMorgan shares rose 6 percent in pre-market trading on Friday after the bank said profits jumped 52 percent to $12.62 billion for the three months ended March 31.
“The US economy remains on healthy footing in general — consumers continue to spend and have strong balance sheets, and business is doing well,” CEO Jaime Dimon said in a letter to investors.
He added, “However, the storm clouds we have been watching over the past year are still looming on the horizon, and the disruption of the banking industry is adding to these risks.”
JPMorgan’s strong performance underscores how big banks have weathered the banking crisis, in part because regulators required them to hold more capital after the 2008 subprime mortgage crisis.
The bank reported on Wednesday that JPMorgan Chase’s revenue jumped to a record high in the first quarter. CEO Jaime Dimon is seen above
The same stringent requirements do not apply to banks with less than $250 billion in assets, a category that included Bank of Silicon Valley and Signature Bank of New York, which collapsed last month in the second and third largest bank failures in US history.
JPMorgan led a group of large US banks that pumped a total of $30 billion in deposits into troubled First Republic Bank in March, providing a lifeline as the regional lender plunged into crisis.
The turmoil in the banking industry has likely benefited the country’s largest banks, as depositors have shifted assets to safe havens.
JPMorgan’s total revenue jumped 25 percent to $38.3 billion for the quarter, a record.
Revenue at the lender’s consumer and community banking unit jumped 80 percent to $5.2 billion, thanks to higher interest rates.
The Federal Reserve raised interest rates by a quarter of a percentage point last month, after a year of rapid rate increases aimed at lowering inflation.
JPMorgan’s net interest income, a measure of how much it earns from lending, rose 49% to $20.8 billion.
JPMorgan’s revenue from its consumer and community banking unit jumped 80 percent to $5.2 billion, thanks to higher interest rates.
JPMorgan shares were up 6 percent in pre-market trading on Friday
Still, investment banking on Wall Street remained a sore spot, amid a drought in deal-making.
Unit revenue fell 24 percent, hit by a sluggish market for mergers and acquisitions and share sales. Stock trading revenues fell by 12 percent. Fixed income trading revenues were flat.
Citigroup and Wells Fargo also reported increases in first-quarter earnings on Friday that beat expectations.
However, both banks have also significantly increased their reserves to cover potential loan losses, a sign that they expect defaults to increase as the economy weakens.
Goldman Sachs and Bank of America will report on Tuesday, and Morgan Stanley will report earnings on Wednesday.
