The JPMorgan Chase & Co (NYSE: JPM) stock price rose 2.95% after releasing the financial results for its fiscal second quarter. The banking giant’s earnings per share came in at $4.37 per share, beating analysts' estimates of $4.00, while its revenues surged to $42.4 billion compared to consensus estimates of $38.96 billion.
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The banking giant noted that most of its revenue growth was driven by higher net interest income, which measures the difference between what the bank charges as interest on loans and what it pays out as interest on deposits. The bank’s bond trading operations also did well during the quarter.
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JPMorgan showed resilience during the second quarter as other smaller regional banks, such as Silicon Valley Bank and Signature Bank, collapsed due to the high interest rate environment. The bank acquired a significant portion of First Republic Bank’s assets after regulators seized it.Â
The bank noted that First Republic added revenues worth $2.4 billion during the quarter. The bank’s results demonstrated its ability to generate profits by leveraging its multiple franchises to generate extra revenues.
JPMorgan’s net interest income surged 44% to $21.9 billion compared to a similar period last year as the bank benefited from the high interest rate environment. On the other hand, most smaller banks have revised their net interest income expectations lower due to higher deposit costs and the Fed’s high lending rates.
Still, the banking major was not spared from some industry problems since it increased its allocation for bad debts by 163% to $2.9 billion to cover future loan losses. The higher figure indicates that the banks sees the economy slowing down in future, leading to higher loan default rates.Â
Jamie Dimon, the bank’s CEO, said that the US economy remains resilient and that its consumer balance sheet remained healthy as consumers are still spending, although at a much slower rate. Investors cheered the bank’s excellent results, as evidenced by the rally in its share price.Â
*This is not investment advice.
JPMorgan (JPM) stock price.
The JPMorgan (JPM) stock price rose 2.95% to tarde at $153.20, from Thursday’s closing price of $148.87.
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