JPMorgan Chase & Co. (NYSE: JPM) early Friday reported record first-quarter profit and revenue, surpassing expectations. The largest U.S. bank by assets benefited from the Federal Reserve’s last move to raise interest rates in December, the fourth time it did so last year. Higher benchmark rates mean lenders can charge more for loans, thus boosting their net incomes.
Net interest income, the difference between revenues generated by interest-bearing assets such as commercial loans and the cost of servicing (interest-burdened) liabilities, grew 9% to $14.45 billion. Non-interest income came in relatively flat, up 1%.
Shares of JPMorgan climbed by nearly 3% in premarket trading following the better-than-expected financials results. The stock was up $4.31, or 4.06% to $110.54 as of 11:09 a.m. ET. Stocks of other US banks, including Morgan Stanley (NYSE: MS) and Goldman Sachs Group Inc. (NYSE: GS) also rallied after JP Morgan’s earnings report.
JPM Earnings & Outlook
JPMorgan posted a profit of $9.18 billion, or $2.65 per share in the three months ended March 31, 2019. In the same three months last year, the banking giant had a profit of $8.71 billion, or $2.37 per share. On average, analysts surveyed by Refinitiv were expecting the lender to come out with earnings of $2.35 per share.
Total revenue, JPMorgan said, was $29.85 billion, up 5% from $28.52 billion in the earlier-year period. Analysts had called for Q1 2019 revenue of $28.44 billion, based on figures compiled by Refinitiv.
In JPMorgan’s asset management unit, profit came to $661 million, down 14% due to lower brokerage activity and market levels. Commercial banking profit rose 3% from a year ago to $1.05 billion.
Trading revenue at JPMorgan’s investment bank, fell 17% to $5.5 billion. Stock trading and bond trading dropped 13% and 8%, respectively. Banking revenue jumped 8% to $3.2 billion thanks in part to higher advisory fees and debt underwriting. The division saw profit decline 18% year-over-year to $3.25 billion.
JPMorgan CEO Comments
Jamie Dimon, Chairman and CEO, commented on the financial results: “In the first quarter of 2019, we had record revenue and net income, strong performance across each of our major businesses and a more constructive environment. Even amid some global geopolitical uncertainty, the U.S. economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong.”
JPMorgan Chase & Co Profile
JPMorgan Chase is one of the largest and most complex financial institutions in the United States, with more than $2.5 trillion in assets. It is organized into four major segments–consumer and community banking, corporate & investment banking, commercial banking, and asset and wealth management. JPMorgan operates, and is subject to regulation, in multiple countries.