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Profit At JPMorgan Chase Drops After $2.9 Billion Fee



Profit At JPMorgan Chase Drops After $2.9 Billion Fee

(CTN News) – The government seized failed regional banks last year, which led to JPMorgan Chase’s $2.9 billion profit decline.

As compared to what analysts at LSEG, formerly known as Refinitiv, expected, here are the company’s results:

  • Earnings for the company: $3.04, down from $3.32 expected.

  • Revenue: $39.94 billion versus $39.78 billion expected.

The bank’s quarterly earnings fell 15% from a year ago to $9.31 billion, or $3.04 per share. Taking into account the regional banking crisis fee and investment losses, earnings would have been $3.97 per share, according to JPMorgan’s estimate.

A 12% increase in revenue, $39.94 billion, exceeded analysts’ predictions.

According to JPMorgan CEO Jamie Dimon, net interest income and credit quality were better than expected. First Republic generated $4.1 billion of profit for the bank in 2023, nearly 50 billion in total.

After acquiring First Republic, a midsize lender to wealthy coastal families, JPMorgan emerged from last year’s regional banking chaos larger and more profitable. In an effort to cover losses from a fund that helped uninsured depositors of seized regional banks, the Federal Deposit Insurance Corporation assessed large U.S. banks with special assessments.

JPMorgan’s shares rose 1.9% in premarket trading.

However, Dimon was cautious about the American economy despite his bank’s performance.

As consumers continue to spend, Dimon said in the release, markets are expecting a soft landing.

Inflation may be stickier and rates higher than expected because of deficit spending and supply chain adjustments, he warned. He noted that central banks’ steps to rein in support programs and wars in Ukraine and the Middle East pose risks to markets and economies.

Due to these significant and somewhat unprecedented forces, he remains cautious.

As the Federal Reserve began raising rates in early 2022, smaller peers have seen their profits squeezed.

Due to customers shifting cash to higher-yielding instruments, the industry has been forced to pay for deposits. The rising yields also mean that the bonds owned by banks have lost value, resulting in unrealized losses.

There is also growing concern about rising losses from commercial loans, especially office building debt, as well as higher credit card defaults.

In addition to guidance on net interest income and loan losses, Dimon will be asked about banks’ efforts to lower capital requirements.

In November, battered bank shares recovered on expectations that the Fed would cut interest rates this year.

The JPMorgan share price soared 27% last year, outperforming the KBW Bank Index’s 5% decline.


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