JPMorgan Chase & Co (NYSE:JPM) has reported record first-quarter revenue as the US’s largest bank by assets continued to generate “considerable amounts of capital”, sending its shares almost 6% higher in Friday pre-market trade.
However, while saying the US economy continues to be on a generally healthy footing, chairman and CEO Jamie Dimon warned that the storm clouds that the bank has been monitoring for the past year remain on the horizon, and the recent banking industry turmoil adds to these risks.
JP Morgan is the first of the large bellwether financial institutions to report results since the failure of Silicon Valley Bank and Signature Bank in early March.
“The banking situation is distinct from 2008 as it has involved far fewer financial players and fewer issues that need to be resolved, but financial conditions will likely tighten as lenders become more conservative, and we do not know if this will slow consumer spending,” Dimon said in a statement. “We also continue to monitor for potentially higher inflation for longer (and thus higher interest rates), the inflationary impact of continued fiscal stimulus, the unprecedented quantitative tightening, and geopolitical tensions including relations with China and the unpredictable war in Ukraine.”
“While we hope these clouds will dissipate, the Firm is prepared for a broad range of outcomes, and we are confident that we can serve the needs of our customers and clients in all environments,” Dimon added.
Ahead of estimates
The bank reported revenue of $38.3 billion for the three months to March 31, 2023, up 25% from $30.7 billion in 1Q 2022 and ahead of the $36.1 billion expected by Wall Street.
Net income jumped 52% to $12.6 billion, resulting in diluted earnings per share of $4.10, up 55% and above the $3.41 forecast by the Street.
It reported a return on equity (ROE) of 18% and a return on average tangible commit equity (ROTCE) of 23%.
In Consumer & Community Banking, the bank noted that consumer spending remained healthy with combined debit and credit card sales up 10% and card loans up 21%.
In the Corporate & Investment Bank, markets revenue fell 4% versus a very strong prior year, and the bank said it focused on supporting clients as they navigated volatile market conditions.
Global investment banking fees remained challenged for the industry, although it said it significantly outperformed the overall wallet.
In commercial banking, it earned record revenue, with exceptionally strong Payments revenue, up 98%.
Finally, it said Asset & Wealth Management performed well with strong long-term inflows of $47 billion across products.
“Our years of investment and innovation, vigilant risk and controls framework, and fortress balance sheet allowed us to produce these returns, and also act as a pillar of strength in the banking system and stand by our clients during a period of heightened volatility and uncertainty,” Dimon continued.
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