On Wednesday, JPMorgan Chase announced that its revenue and profit surpassed the expectations of analysts, due in part to a vigorous trading outcome. The bank’s first-quarter profit amounted to $4.50 per share, or $14.3 billion. That included $1.28 a share from its reserve release. Analysts had previously expected a $3.10 per share profit.
The bank has also set aside $5.2 billion in reserve for expected loan losses, but those losses didn’t manifest, boosting JPMorgan’s cash profile even further. The positive news is a sign that the banking industry could have fewer loan defaults than last year’s when the bank put aside billions for loan defaults that were expected because of the COVID-19 outbreak. Last year at this time, the bank added $6.8 billion to its credit reserves.
In all, the New York City-based banking conglomerate had $33.12 in revenue, exceeding a $30.52 billion estimate. The bank’s trading activities, which surpassed expectations by about $1.8 billion, are said to have driven the boost.
Trading in fixed income for the bank amounted to $5.8 billion of revenue, 15 percent or $800 million more than analysts expected. Its equities trading revenue went up by 47 percent, or $3.3 billion, making $1 billion more than forecast.
The majority of the quarter’s reserve release was from JPMorgan’s retail division, with credit card consumers and borrowers of home loans contributing to the reserves. Last year, JPMorgan’s consumer banking division surged by $6.5 billion. This year, it hit $6.73 billion. Consumers have also been paying down their balances on mortgages and credit cards.
JPMorgan’s CEO, Jamie Dimon, is optimistic about the U.S. economy in the near term.
“With all of the stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and business balance sheets, and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust multi-year growth,” Dimon said in a press release.
JPMorgan is the global bank leader by revenue totals. Thus far, in 2021, JPMorgan shares have risen by 21 percent.