The U.S. stock earnings season officially kicks off! JPMorgan Chase sets new quarterly profit record for U.S. banks
On Tuesday evening, Beijing time, JPMorgan Chase, the largest bank in the United States, released a financial report that comprehensively exceeded market expectations, marking a good start to the new US stock market earnings season. Overall, JPMorgan Chase achieved a net profit of US$21.155 billion in the second quarter, a quarterly record high, a year-on-year increase of 41%; diluted earnings per share were US$7.70. This is also a new quarterly profit record for the U.S. banking industry. It is worth noting that this includes approximately US$5.6 billion in pre-tax income from Visa shares and partial equity investments.
On Tuesday evening, Beijing time, JPMorgan Chase, the largest bank in the United States, released a financial report that comprehensively exceeded market expectations, marking a good start to the new US stock market earnings season. Overall, JPMorgan Chase achieved a net profit of US$21.155 billion in the second quarter, a quarterly record high, a year-on-year increase of 41%; diluted earnings per share were US$7.70. This is also a new quarterly profit record for the U.S. banking industry. It is worth noting that this includes approximately US$5.6 billion in pre-tax income from Visa shares and partial equity investments. Excluding these major items, net profit was $16.9 billion, or $6.14 per share. Whether excluding one-time income or not, it exceeded analysts' expectations of $5.64 per share. Management revenue reached US$58 billion, a year-on-year increase of 27%, and market expectations were US$50.19 billion. Wall Street’s “big brother”, JPMorgan Chase CEO Jamie Dimon, said in a statement that the company’s revenue in each business line set a new record in the second quarter. The financial report shows that JPMorgan Chase’s stock business revenue increased by 86% year-on-year in the second quarter to US$6.03 billion, far exceeding market expectations. This pushed total transaction revenue to $12.1 billion, exceeding the previous high set in the first quarter of this year. As the main underwriter of SpaceX's record-breaking listing, JPMorgan Chase received a total of US$3.28 billion in investment banking fee income in the second quarter, a year-on-year increase of 30%, exceeding analyst expectations. Both equity and debt underwriting businesses beat expectations, but M&A advisory revenue grew 20%, slightly lower than the 27% growth analysts expected. According to Dealogic data, JPMorgan Chase is still the largest investment bank in the world in terms of revenue. In addition to SpaceX's IPO, the bank was involved in several landmark transactions during the quarter, including serving as co-adviser on NextEra Energy's $67 billion merger with Dominion Energy and as lead bookrunner on Google parent Alphabet's $85 billion stock offering. JPMorgan Chase's asset and wealth management (AWM) business revenue increased by 19%, and net inflows of long-term assets under management reached US$50 billion, pushing the asset management scale to exceed US$5 trillion. Net interest income in the second quarter was US$25.5 billion, an increase of 10% year-on-year. The company also raised its full-year net interest income forecast to about $105.5 billion, up from the $103 billion expected in April. As for the windfall from Visa's equity, the company explained that on April 13, Visa launched a share exchange offer, and JPMorgan Chase subsequently exchanged its 18.6 million Visa Class B-2 common shares into a combination of Visa Class B-3 common shares and Class C common shares. After the exchange was completed, the Visa Class C shares obtained were measured at fair value, thereby recognizing net income of approximately US$4.6 billion. After the financial report was released, JPMorgan Chase temporarily fell by more than 2% before the market opened. If the company's stock price closes lower today, it will also extend the record of declines after earnings reports to the fifth consecutive quarter. Some analysts said the reason was that JPMorgan Chase raised its full-year cost guidance to about $107.5 billion, which was higher than the $106 billion guidance Dimon gave at an industry conference in May this year and higher than the $105 billion forecast in April. The bank explained that the increase in costs was "mainly due to increased business activity and higher-than-expected revenue growth, which pushed up related expenses linked to business volume and revenue." Regarding the economic outlook, Dimon said: "Since the beginning of this year, the U.S. economy has shown significant resilience, with corporate investment and hiring activities increasing. A number of favorable factors are supporting this strong performance, including artificial intelligence-driven capital investment, fiscal stimulus, and the benefits of improved regulatory efficiency." He also added: "However, some risks are moving like tectonic plates below the surface, including geopolitical tensions and wars, sticky inflation, large fiscal deficits around the world, and elevated asset prices... We are monitoring these risks closely and have prepared a wide range of scenarios." (