JPMorgan's 2nd-quarter earnings beat forecasts as investment banking revenue surges 91%
JPMorgan Chasereported second-quarter earnings Tuesday that beat Wall Street's revenue and profit forecasts, reflecting strong gains in its corporate and investment bank division.
- Investment-banking revenue surged 91%, fixed-income
marketsrevenue roughly doubled, and equity-markets revenue rose 38%.
- "We are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm," CEO
Jamie Dimonsaid in the earnings release.
- The bank's shares climbed 1.9% in premarket trading.
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Here are the key numbers:
- Net income: $4.69 billion versus $3.27 billion estimated
- Earnings per share: $1.38 versus $1.01 estimated
- Revenue: $33.8 billion versus $30.6 billion estimated
Dimon highlighted "much uncertainty" around the current economic outlook, but trumpeted JPMorgan's strong finances."We are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm," he said. "We ended the quarter with massive loss-absorbing capacity — over $34 billion of credit reserves and total liquidity resources of $1.5 trillion, on top of $191 billion of common-equity tier 1 capital, with significant earnings power that would allow us to absorb even more credit reserves if needed," he added.
Read more: BlackRock's bond chief who oversees $2.3 trillion told us how the coronavirus crisis created a game-changing investment opportunity for the first time in almost 20 years — and shared 4 ways he's cashing in
JPMorgan's corporate and investment bank was its standout segment. Net revenue soared 66% there to a record $16.4 billion as investment-banking revenue surged 91% and markets revenue jumped 79%. The latter gain reflected a 99% rise in fixed-income revenues and a 38% increase in equity revenues.The division's revenue growth fueled an 85% increase in its net income to $5.5 billion.
Net revenue also rose 5% in JPMorgan's commercial banking unit and 1% in its asset and wealth management division.
However, the commercial banking division swung from $1 billion in net income in the second quarter of last year to a net loss of $691 million, reflecting a $2.4 billion provision for credit losses.Net income also fell 8% in the asset and wealth management division due to roughly $220 million in similar provisions.
It also boosted its credit-loss provision by $4.7 billion to over $5.8 billion, resulting in a net loss of $176 million, compared to $4.2 billion in net income in the same period last year.JPMorgan's earnings fell more than 70% in the first quarter as it built up credit reserves in response to the coronavirus
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