JPMorgan (JPM) Beats Expectations for Q1

JPMorgan Chase & Co. (NYSE:JPM) started its journey way back in 1779 with the establishment of its first predecessor called the Manhattan Company. The bank in its current form is a result of the consolidation of hundreds of predecessor institutions during its decades-long journey. It is considered one of the world’s oldest and biggest financial institutions. JPMorgan offers a range of financial and investment banking services across all major capital markets around the world.

The New York-based banking giant recently announced its financial results for the first quarter above expectations. JPM reported earnings of $14.30 billion, or $4.50 per share for the three months ended March 31, significantly higher than $2.87 billion, or 78 cents per share in the comparable period of 2020. Excluding certain non-recurring items, the adjusted earnings of $3.31 per share easily surpassed the consensus forecast of $3.09 per share.

However, net interest income decreased 11 percent to $13 billion in the quarter, mainly due to lower interest rates. Analysts on average were expecting JPM to report a net interest income of $13.2 billion.

Revenue for the quarter jumped 14 percent on a year-over-year basis to $33.1 billion, crushing analysts’ average estimate of $30.5 billion. The results were mainly driven by credit reserve releases of $5.2 billion as well as improving economy.

If we look at the performance of key segments, revenue at the consumer and community banking (CCB) division slipped 6 percent to $12.52 billion, while revenue at the corporate and investment bank (CIB) climbed 46 percent to $14.6 billion in the quarter.

Speaking on the results, CEO Jamie Dimon said in a statement, “JPMorgan Chase earned $14.3 billion in net income reflecting strong underlying performance across our businesses, partially driven by a rapidly improving economy. These results include a benefit from credit reserve releases of $5.2 billion that we do not consider core or recurring profits. We believe our credit reserves of $26 billion are appropriate and prudent, all things considered.”

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