JPMorgan, the biggest US bank by assets, has reporter second quarter net income of $11.9bn, up $7.3bn, driven by credit reserve releases of $3.0bn compared to credit reserve builds of $8.9 billion in the prior year.
Net revenue fell 7% to $31.4bn. Net interest income of $12.9bn, was also down 8%, predominantly driven by lower net interest income in CIB Markets and lower loans in Card.
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Noninterest expense came to $17.7bn, up 4%, largely driven by continued investments in the business including technology and front office hiring.
The provision for credit losses was a net benefit of $2.3bn driven by net reserve releases of $3.0bn and $734m of net charge-offs, compared to an expense of $10.5bn in the prior year predominantly driven by net reserve builds of $8.9bn.
The net reserve release was driven by improvements in the Firm’s economic outlook.
The net reserve release comprised of $2.6bn in Consumer – predominantly driven by $1.8bn in Card and $600m in Home Lending – and $442m in Wholesale.
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By GlobalDataNet charge-offs of $734m were down $826m on decreases in both Consumer, predominantly in Card, and in Wholesale.
“Consumer and wholesale balance sheets remain exceptionally strong”
“Consumer and wholesale balance sheets remain exceptionally strong as the economic outlook continues to improve,” CEO Jamie Dimon said in the release.
“In particular, net charge-offs, down 53%, were better than expected, reflecting the increasingly healthy condition of our customers and clients.”
Trading revenue was expected to decline from the year earlier period, which saw frenzied activity in the aftermath of Federal Reserve actions to bolster markets during the early stage of the coronavirus pandemic.
Fixed income trading produced $4.1bn in revenue, just under the $4.16bn estimate of analysts surveyed by FactSet. Equities trading generated $2.69bn in revenue, topping the $2.31bn estimate.
The combined figure was in line with Dimon’s guidance last month of “a little north of $6 billion” in trading revenue.
Reshuffling at the top
The bank has named two senior executives, Marianne Lake and Jennifer Piepszak, to run the company’s sprawling consumer bank.
The changes led to the promotion of global research head Jeremy Barnum to CFO succeeding Piepszak; this is Barnum’s first quarter handling the firm’s earnings release.
Dimon may also be asked about his acquisition strategy after making the third purchase of a fintech start-up since December. Last month, the bank agreed to buy ESG investing platform OpenInvest.
