JPMorgan Chase (JPM), the largest US bank by assets, kicked off the second-quarter earnings season for big banks Tuesday by delivering stronger-than-expected results during the height of the COVID-19 pandemic.
These were the key figures against expectations for the second quarter, according to analysts surveyed by Bloomberg.
JPMorgan’s bottom line was bolstered by the dizzying rise in business revenue as the COVID-19 crisis increased market volatility. However, the bank experienced a 51% drop in net income, as it reserved $ 8.9 billion in credit reserves for the quarter, in anticipation of possible credit losses due to worsening pandemic severity.
In management’s comment, CEO Jamie Dimon noted that the company had generated its “highest quarterly revenue” before reserving reserves for credit losses.
JPMorgan Chase increased its bad loan reserves to $ 8.9 billion during the second quarter.
“Despite some recent positive macroeconomic data and significant and decisive government action, we still face a great deal of uncertainty regarding the future path of the economy. However, we are prepared for all eventualities as our balance of strength allows us to remain a port in the storm, “Dimon said in a statement.
Dimon added that the company has “massive loss absorbing capacity” with more than $ 34 billion in credit reserves and liquidity above $ 1.5 trillion, in addition to CET1 capital of $ 191 billion.
“This is why we can continue to serve all of our interest groups and pay our dividends, unless the economic situation deteriorates materially and significantly,” added Dimon.
Business revenue was strong, with a 79% boom from a year ago to $ 9.7 billion. Fixed-income revenue increased a whopping 99% to $ 7.3 billion year-over-year, while equity trading revenue increased 38% to $ 2.4 billion “driven by strong customer activity in derivatives and cash shares. “
Bank income increased 46% from a year ago to $ 5 billion. Investment banking revenues increased 91% to $ 3.4 billion due to higher fees.
Meanwhile, in the community and consumer banking business, credit card sales volume decreased 23% from a year earlier, while average loans fell 7%. Average deposits increased 20%. JPMorgan also increased its bad debt consumer loan reserves, with most of it spent on its card business.
