JPMorgan Chase posted $21.2 billion in second-quarter profit on Tuesday, a chase record for a U.S. bank. The result came as the stock rose 2.5%, giving shareholders a sharp move on a day built around earnings.
The bank said profit jumped 41% from a year earlier, while earnings reached $7.70 per share and revenue climbed to $57 billion from $45 billion. Jamie Dimon said on a Tuesday analyst call, "It's getting close to as good as it gets".
Jamie Dimon on Wall Street
Dimon said, "We're in a very healthy, active, exuberant market with very high prices and very high volumes. We benefit from that. We just don't know how long it will continue". He also said in the company's press release, "We cannot predict how these forces will ultimately play out". On a call with reporters, he added, "They can easily collide in a way that will surprise you".
The quarter was powered in part by $4.6 billion in gains from the sale of Visa shares held by the corporate division and another $1 billion from certain equity investments. Without those one-time gains, net income would have been $16.9 billion. That leaves the core business behind the record still strong, but not the full story.
Jeremy Barnum and consumer spending
Jeremy Barnum said, "We've talked about the consumer being fine, and I think relative to that, the consumer is maybe slightly better this quarter... the labor market remains quite resilient". He also said, "It's not a dramatic shift, but at the margin, I would say the consumer is a little bit stronger." Combined debit and credit card sales volume at JPMorgan Chase's consumer bank rose 10% from the year-ago period.
Trading and underwriting added more weight. Equity trading jumped 86% to a record $6 billion, and equity underwriting revenue rose 78% to $829 million. Net interest income increased 10% to $25.5 billion, and JPMorgan Chase raised its full-year guidance for net interest income excluding its Markets business by $1.5 billion to $96.6 billion.
JPMorgan Chase guidance
The quarter also changed the outlook for credit. JPMorgan Chase lowered the percentage of card loans it expects to write off this year to 3.2% from its 3.4% April projection. That gives investors a cleaner read on how much of the profit surge came from recurring lending and trading activity versus the lift from the Visa sale and equity stakes.
Analysts expected another strong earnings season for big banks, and JPMorgan Chase set the opening benchmark. The next comparison will come when other big banks report, but this one already resets the bar at $21.2 billion.
