JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) reported better-than-expected financial results for the second quarter, driven by strong trading and investment banking performance.
The bank reported earnings per share of $5.24, far ahead of the Wall Street consensus of $4.48 per share.
Net income was $15 billion, down 17% from $18 billion a year earlier, but excluding a one-time $8 billion gain, signalling strong underlying profitability.
This included a 23% year-over-year increase in Consumer & Community Banking income to $5.2 billion. Commercial & Investment Bank income was up 13% to $6.7 billion, and Asset & Wealth Management income was up 17% at $1.5 billion.
Total revenue of $45.7 billion beat estimates of $44 billion, despite representing a 10% year-over-year decline.
The company grew its assets under management to $4.3 trillion, up 18% year-over-year.
Net interest income was $23.3 billion, up 2% year-over-year. For the full year, the company raised its net interest income guidance to $95.5 billion, up from $90 billion previously.
JPMorgan CEO Jamie Dimon noted that while the US economy remained resilient during the quarter, significant risks remain.
“The finalization of tax reform and potential deregulation are positive for the economic outlook, however, significant risks persist – including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices,” Dimon said.
“As always, we hope for the best but prepare the firm for a wide range of scenarios.”
‘Another quarter, another beat’
Analysts at UBS see JPMorgan’s second quarter as another clear display of operational strength.
While net interest income came in slightly below forecast, the analysts wrote that the shortfall was likely driven by a higher proportion of markets-related net interest income, especially given what they described as a “material” beat in fixed income, currencies, and commodities (FICC) trading.
Despite the miss, JPMorgan raised its net interest income forecast excluding markets by $2 billion, and its firmwide net interest income forecast by $1 billion.
UBS noted that this upward revision to revenue guidance should effectively offset the company’s newly guided $350 million increase in full-year expenses, describing the change as “a wash.”
UBS also pointed to standout performance in markets and investment banking. The bank’s markets division exceeded expectations by $0.14 per share, which UBS attributed to the strength in FICC trading, while equities results were largely in line.
Investment banking fees also came in $0.12 ahead of forecast, with UBS highlighting equally strong contributions from debt capital markets, which added $0.06, and advisory, which added $0.05.
The firm also emphasized continued strength in consumer lending, noting that card receivables grew 8% year-over-year and characterizing JPMorgan as “a company that continues to hit on all cylinders.”
UBS also highlighted the bank’s cautious stance on provisioning, writing, “JPM appeared particularly conservative when reflecting Liberation Day effects in 1Q allowance, especially relative to peers.”
Despite a slight uptick in expenses and the premium valuation, the UBS analysts concluded: “We expect these results to be well received today.”
Shares of JPMorgan were little changed in early trade on Tuesday, trading at $288.