JP Morgan Q2 revenue of $45.7 billion, net profit of $15 billion, strong performance in trading and investment banking | Earnings report insights

JP Morgan's second-quarter earnings and revenue both exceeded Wall Street analysts' expectations, primarily due to strong performance in trading operations amid market volatility and signs of recovery in investment banking.

On the 15th, JP Morgan announced its financial performance for the second quarter:

• Revenue of $45.7 billion, a year-on-year decrease of 10%, and a quarter-on-quarter decrease of 1%
• Reported net profit of $15 billion, with net profit of $14.2 billion after excluding special items
• Return on equity (ROE) of 18%, return on tangible common equity (ROTCE) of 21%
• Earnings per share of $5.24

Core business progress:

• Consumer & Community Banking (CCB): Net increase of 500,000 checking accounts, credit card sales increased by 7% year-on-year
• Corporate & Investment Bank (CIB): Investment banking fees increased by 7% year-on-year, market trading revenue reached $8.9 billion, a year-on-year increase of 15%
• Asset & Wealth Management (AWM): Assets under management reached $4.3 trillion, a year-on-year increase of 18%, with net inflows of $80 billion

JP Morgan's stock rose over 2% in pre-market trading.

JP Morgan's Q2 net profit of $15 billion shows strong performance, but revenue declines 10% year-on-year

Despite JP Morgan's Q2 net profit reaching $15 billion, revenue decreased by 10% year-on-year to $45.7 billion. The decline was primarily due to the base effect of $7.7 billion in Visa stock gains in the same period last year.

Net interest margin continues to be under pressure. The report shows that net interest income, excluding market trading operations, was $22.8 billion, a year-on-year decrease of 1%, mainly impacted by the dual pressures of a low-interest-rate environment and a contraction in deposit spreads. This trend is particularly evident in the consumer banking business, where net income from mortgage loans decreased by 5% to $1.25 billion.

Investment banking business performs well, initial signs of credit quality pressure emerge

The investment banking business performed well, with investment banking fees increasing by 7% year-on-year to $2.5 billion, and the growth in bond underwriting and advisory fees partially offset the decline in equity underwriting fees. Market trading revenue of $8.9 billion increased by 15% year-on-year, with fixed income trading revenue of $5.7 billion (up 14%) and equity trading revenue of $3.2 billion (up 15%), demonstrating profitability amid market volatility.

The asset management business continues to expand, with assets under management reaching $4.3 trillion, a year-on-year increase of 18%, and total client assets exceeding $6.4 trillion. The net inflow of $80 billion reflects institutional and high-net-worth clients' recognition of JP Morgan's asset management capabilities.

However, it is noteworthy that credit costs reached $2.8 billion, with net charge-offs of $2.4 billion, an increase of $179 million year-on-year, primarily concentrated in credit card business. Net reserves increased by $439 million, with the increase in wholesale business reserves reflecting the impact of growth in lending activities and changes in credit quality of specific exposures The net charge-off rate for credit card business reached 3.40%. Although it remains within a controllable range, the trend of this indicator needs to be closely monitored, especially against the backdrop of increasing macroeconomic uncertainty.

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