(C) Reuters. JPMorgan Earnings, Revenue Beat in Q1
By Geoffrey Smith and Dhirendra Tripathi
Investing.com – JPMorgan (NYSE:JPM) set a blistering start to the first-quarter earnings season, reporting earnings per share nearly 50% ahead of expectations for the three months through March – albeit thanks largely to one-off factors and extraordinary conditions in capital markets.
Revenue was nearly 10% ahead of expectations at $33.12 billion, but the bank’s cost-income ratio ticked higher to 58% from 55% in the final quarter of 2020.
The numbers were juiced by the release of some $5.2 billion in reserves against possible loan losses that the bank had built at the start of the pandemic. The bank made $1.1 billion of fresh write-offs in the quarter.
CEO Jamie Dimon said in a statement that the bank’s remaining credit reserves of $26 billion “are appropriate and prudent, all things considered,” and stressed that the release of previous reserves should not be regarded as a recurring factor.
The corporate and investment bank arm flourished, as expected, against a backdrop of buoyant financial markets and a boom in the formation of Special Purpose Acquisition Companies. Overall revenue at the division was up 46% from a year earlier at $14.6 billion. Equity markets revenue was up 47% at $3.3 billion, while fixed-income revenue was up 15% at $5.8 billion.
Investment banking revenue was $2.9 billion, up $2 billion, as investment banking fees rose 57%.
The consumer bank, by contrast, put in a weaker performance, with home lending stagnating on the quarter and modest declines in consumer and auto loans, against a backdrop of steadily rising interest rates.
JPMorgan shares are up 21% from the beginning of the year, still down 4.69% from its 52 week high of $161.68 set on March 18. They are outperforming the S&P Global 100 which is up 8.82% from the start of the year.
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JPMorgan Earnings Blow Past Expectations on $5.2 Billion Reserve Release
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