JPMorgan Chase Q1 Results Top Estimates; Stock Up In Pre-market

Banking major JPMorgan Chase & Co. reported Friday higher earnings and revenues for its first quarter, both above Street estimates. The company said its lines of business recorded continued momentum in the quarter.

In pre-market activity on the NYSE, JPMorgan shares were gaining around 6.03 percent.

Looking ahead, Jamie Dimon, Chairman and CEO, said, “The U.S. economy continues to be on generally healthy footings—consumers are still spending and have strong balance sheets, and businesses are in good shape. However, the storm clouds that we have been monitoring for the past year remain on the horizon, and the banking industry turmoil adds to these risks… 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.”

In the first quarter, the company’s net income grew 52 percent to $12.62 billion from prior year’s $8.28 billion. Earnings per share were $4.10, up 56 percent from $2.63 last year.

Analysts on average had expected the company to earn $3.41 per share, according to figures compiled by Thomson Reuters. Analysts’ estimates typically exclude special items.

The company’s reported revenue went up 25 percent to $38.35 billion from last year’s $30.72 billion. Managed revenue for the quarter rose 24.5 percent to $39.34 billion from $31.59 billion last year.

The Street was looking for revenues of $36.23 billion for the quarter.

Net interest income was $20.8 billion, up 49 percent from last year. Net interest income excluding Markets was $20.9 billion, up 78 percent. Noninterest revenue was $18.5 billion, up 5 percent mainly driven by higher CIB Markets noninterest revenue.

Provision for credit losses grew 56 percent from last year to $2.28 billion. Noninterest expense was $20.1 billion, up 5 percent, driven by higher structural expense and continued investments in the business.

Segment wise, Consumer & Community Banking net revenue was $16.5 billion, up 35 percent. Consumer spending remained healthy with combined debit and credit card sales up 10 percent and card loans up 21 percent.

In Corporate & Investment Bank, net revenue of $13.6 billion was flat to the prior year. Commercial Banking net revenue was $3.5 billion, up 46 percent, driven by higher deposit margins, partially offset by lower deposit-related fees.

Asset & Wealth Management net revenue grew 11 percent from last year to $4.8 billion, driven mainly by higher deposit margins on lower balances.

In the quarter, average loans went up 6 percent, while average deposits fell 8 percent.

Assets under management were $3.0 trillion, up 2 percent, driven by continued net inflows, largely offset by lower market levels.

CET1 ratio increased to 13.8 percent, compared to a regulatory requirement of 12.5 percent and our target of 13 percent for the first quarter.

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