Why JPMorgan Shares Are Surging Today

JPMorgan Chase & Co JPM reported Q2 net revenue (managed) of $42.4 billion, up 34.1% year-over-year, beating the consensus of $38.96 billion. Reported revenue was $41.31 billion, up 34.5% Y/Y.

Noninterest revenue was $20.5 billion, up 25%, or up 6% YoY excluding First Republic, driven by higher CIB Markets noninterest revenue.

Net interest income increased by 44% YoY to $21.9 billion and +38%, excluding First Republic.

Noninterest expense was $20.8 billion, up 11%, or +8%, excluding First Republic.

Average loans were up 13%, and average deposits were down 6% for the quarter.

Q2 Consumer & Community Banking revenue increased 37% YoY to $17.23 billion, Corporate & Investment Banking was $12.5 billion (+4% Y/Y), and Commercial Banking was $3.99 billion (+49% Y/Y).

Asset and Wealth Management revenue was $4.94 billion (+15% Y/Y), and Corporate revenue of $3.72 billion included an estimated bargain purchase gain of $2.7 billion attributable to First Republic.

Debit and credit card sales volume increased by 7% Y/Y, and Active mobile customers were up 10% Y/Y.

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JPM's Q2 provision for credit losses was $2.9 billion, an increase of 163% YoY.

Investment Banking fees were down 6% YoY, driven by lower advisory fees, and Investment banking fees revenue fell 7% Y/Y.

Adjusted EPS was $4.37, beating the consensus of $3.99 and ROTCE of 23%.

Assets under management (AUM) stood at $3.2 trillion (+16% Y/Y), and client assets stood at $4.6 trillion (+20% Y/Y), driven by continued net inflows, higher market levels and the impact of the acquisition of Global Shares. 

CET1 capital of $236 billion, with standardized CET1 capital ratio of 13.8%; Advanced CET1 capital ratio of 13.9%.

Also Read: Why JPMorgan Says Bitcoin ETF Is No Big Deal

"While we expect material capital changes with the finalization of Basel III and probable changes to come for bank liquidity, we will manage to any new requirements as we have demonstrated in the past; however, we caution that material regulatory changes would likely have real world consequences for markets and end users," commented Jamie Dimon, Chairman, and CEO.

Outlook FY23: JPMorgan expects net interest income and net interest income excluding Markets of ~$87 billion. It anticipates card services NCO rate of approximately 2.60%.

Price Action: JPM shares are trading higher by 2.75% at $152.97 premarket on the last check Friday.