JPMorgan Chase Confident In First Republic Takeover, Raises 2023 NII Guidance by $3B

JPMorgan Chase & Co JPM raised its net interest income (NII) guidance to around $84 billion for 2023 on Monday. 

The new guidance is higher than the company's earlier expectation of $81 billion, stated during the Q1 2023 call. 

The upgraded guidance reflects JPM's optimism about the takeover of First Republic Bank FRCB. 

The acquisition included $173 billion in loans and $30 billion in securities, as well as an assumption of about $92 billion in deposits. JPMorgan expects to recognize an upfront gain of $2.6 billion and remain well capitalized with a CET1 ratio in line with its Q1 2024 target of 13.5%. 

Also related: 'Great Deal For JPMorgan': Bank Analysts Weigh In On First Republic Acquisition 

JPMorgan said deposit-related uncertainty remains a matter of concern.

The bank reiterated its 2023 adjusted expense guidance at around $84.5 billion, excluding the integration cost of about $3.5 billion related to the First Republic.

The bank expects NII in the mid-$70 billion range and a return on tangible common equity of around 17% in the medium term.

Also read: Has Jamie Dimon Become 'Too Big For His Boots' After First Republic Takeover? StanChart CEO Weighs In

JPM Price Action: JPM shares are trading lower by 0.12% at $139.02 on last check Monday.

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