{"id":121167,"date":"2021-04-14T14:37:20","date_gmt":"2021-04-14T14:37:20","guid":{"rendered":"https:\/\/precoinnews.com\/?p=121167"},"modified":"2021-04-14T14:37:20","modified_gmt":"2021-04-14T14:37:20","slug":"jpmorgan-profits-on-capital-markets-in-a-cash-flush-economy","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/jpmorgan-profits-on-capital-markets-in-a-cash-flush-economy\/","title":{"rendered":"JPMorgan profits on capital markets in a cash-flush economy"},"content":{"rendered":"

(Reuters) -JPMorgan Chase & Co\u2019s first-quarter results on Wednesday laid bare the challenge big banks face in this phase of the pandemic, where stimulus programs have left individuals and businesses in good financial shape but so flush with cash that few of them need loans.<\/p>

FILE PHOTO: A J.P. Morgan logo is seen in New York City, U.S., January 10, 2017. REUTERS\/Stephanie Keith\/File Photo<\/figcaption>

The biggest U.S. bank sailed past Wall Street expectations by reporting a nearly 400% increase in quarterly profit. The gains came from JPMorgan releasing more than $5 billion it had set aside to cover potential coronavirus loan losses that have not materialized, as well as a continued boom in capital-markets activity.<\/p>\n

However, its loan book shrank, the average interest it collects from loans decreased and its ratio of loans to deposits of 44% is about half what big banks ideally want to see.<\/p>\n

JPMorgan Chief Executive Jamie Dimon described the dynamic as a good one, with individuals and businesses ready to start spending and investing again \u2013 even if that means banks experience a temporary pause in loan demand.<\/p>\n

\u201cThe consumer has so much money to pay down their credit card loan, which is good,\u201d he said on a call with journalists, noting that consumers have $2 trillion more in their checking accounts than they did pre-pandemic. \u201cTheir balance sheet is in excellent, outstanding shape. Coiled, ready to go, and they are starting to spend money. That\u2019s not the same as loan demand when the economy is weak.\u201d<\/p>\n

Similarly, businesses got help from government programs and raised a significant amount of financing, Dimon said.<\/p>\n

\u201cWhen they raise cash in the public markets they can pay down loans to banks,\u201d he said. \u201cThis is not bad news about loan demand. This is actually good news.\u201d<\/p>\n

JPMorgan expects loan demand to pick up later this year and for deposits to grow further as the Fed keeps expanding its balance sheet, executives said.<\/p>\n

Indeed, analysts cheered JPMorgan\u2019s results, noting that the situation is much better than a year ago, when banks were worried about the pandemic causing widespread loan defaults.<\/p>\n

JPMorgan\u2019s profit rose to $14.3 billion, or $4.50 per share, in the quarter ended March 31, from $2.9 billion, or 78 cents per share, a year earlier. Excluding the reserve releases, which the industry does not count as \u201ccore\u201d profit, the bank\u2019s earnings per share were about $3.31 per share, analysts said.<\/p>\n

Analysts had expected earnings of $3.10 per share, on average, according to Refinitiv.<\/p>\n

Revenue jumped 14% to $33.1 billion.<\/p>\n

JPMorgan is widely viewed as a barometer of the U.S. economy, global markets and the health of consumers and businesses. Its results can drive broader stock prices and Dimon\u2019s words carry heft not just in Wall Street circles but for broader views on policies, politics and society at large.<\/p>\n

Its results may bolster investor optimism about an economic recovery this year as more people get vaccinated and the Biden administration pursues infrastructure programs and potentially more stimulus dollars.<\/p>\n

\u201cCorporate spending is picking up and (management) sees the potential for a multi-year extremely robust economy ahead,\u201d said Evercore ISI analyst Glenn Schorr.<\/p>\n

JPMorgan\u2019s shares were down 0.9% in early trading, having risen significantly in recent months.<\/p>\n

The bank\u2019s trading and investment banking businesses continued to blossom, even as its traditional lending operation stuttered. Spurts of volatility across equities, fixed income, currencies and commodities over the past year have helped Wall Street banks, while a boom in underwriting and IPOs has also bolstered the bottom line.<\/p>\n

JPMorgan\u2019s Corporate & Investment Banking division posted a 46% rise in revenue. Industry-wide investment banking fees hit an all-time high during the quarter, with JPMorgan jumping up a notch to No. 2 in global league tables, according to Refinitiv data.<\/p>\n

The bank\u2019s Consumer & Community Banking unit reported a 6% decline in revenue. Its credit card statistics showed individual spending above pre-pandemic levels, but overall credit card balances were down.<\/p>\n

The bank slightly lowered its full-year outlook for interest income and bumped up its outlook for expenses, as rates remain near historic lows and revenue-related expenses have risen.<\/p>\n

Goldman Sachs Group Inc also beat estimates on Wednesday with a big surge in trading revenue, while Wells Fargo & Co showed similar trends in its loan portfolio.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

(Reuters) -JPMorgan Chase & Co\u2019s first-quarter results<\/p>\n","protected":false},"author":3,"featured_media":121166,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"\nJPMorgan profits on capital markets in a cash-flush economy - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/business\/jpmorgan-profits-on-capital-markets-in-a-cash-flush-economy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"JPMorgan profits on capital markets in a cash-flush economy - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"(Reuters) -JPMorgan Chase & Co\u2019s first-quarter results\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/business\/jpmorgan-profits-on-capital-markets-in-a-cash-flush-economy\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-04-14T14:37:20+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/04\/JPMorgan-profits-on-capital-markets-in-a-cash-flush-economy.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/business\/jpmorgan-profits-on-capital-markets-in-a-cash-flush-economy\/\",\"url\":\"https:\/\/precoinnews.com\/business\/jpmorgan-profits-on-capital-markets-in-a-cash-flush-economy\/\",\"name\":\"JPMorgan profits on capital markets in a cash-flush economy - 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