JPMorgan Chase & Co. (JPM), the largest US bank by assets, is the first of a large group of banks to reveal first-quarter results this week as earnings season kicks off.
The company has been a strong performer in the banking sector, which has meaningfully lagged out of the broader market this year amid concerns about US banks’ ties to Russia and fears of an economic slowdown. However, JPMorgan shares are down 18.7% since the beginning of the year.
JPMorgan released its quarterly results Wednesday. Here are the key numbers against expectations, according to analysts polled by Bloomberg.
Revenues (Adjusted): $31.59 billion vs. $31.44 billion expected, $30.35 billion in Q4
Earnings per share (Adjusted): $2.63 per share versus $2.72 forecast, $3.33 per share in Q4
Wednesday’s report reversed a lackluster quarter for banking strength after a choppy start to the year on Wall Street as the Russia-Ukraine war and economic uncertainty weighed on markets. JPMorgan reported lower-than-expected first-quarter net income of $8.3 billion, or $2.63 per share, down 42% from the same period in 2021.
Investment banking also came in below analysts’ estimates of $2.1 billion versus the $2.25 billion expected as geopolitical tensions in Eastern Europe brought deal activity to a standstill. The bank said investment banking fees fell 31 percent due to a drop in equity and debt underwriting activity.
JPMorgan shares were down 1% in premarket trading to $130.10 as of 7:28 AM ET.
“We remain optimistic about the economy, at least in the short term, but we see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine,” CEO Jamie Dimon said. statment.
Among the key metrics that investors watch closely was a company’s net interest margin, the difference between a bank’s earnings on lending activities and the interest it pays to depositors. This number will benefit from higher interest rates, but if the Fed raises rates too aggressively and pushes the economy into recession, JPMorgan’s lending activity could take a hit.
After first-quarter results, JPMorgan CEO Jamie Dimon is expected to share his views on geopolitical risks and the Fed’s monetary tightening plans. bank head He cautioned in his closely read annual letter to shareholders Earlier this month, the ongoing Russian invasion of Ukraine was expected to significantly slow the US and global economy.
Damon is also likely to face questions about his remarks regarding JPMorgan’s $1 billion loss over time due to the war. He did not say the exact timeframe or how the estimate was calculated, but a JPMorgan spokesperson told Yahoo Finance after Dimon’s letter was released that the loss could be related to potentially troubled assets affected by the war.
Although the bank said it was not concerned about its direct exposure to Russia, the institution was concerned about the “secondary and implicit effects” of the crisis and the sanctions it is imposing on many companies and countries.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed
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