Jamie Dimon, chairman and CEO of JPMorgan Chase, held a lunch meeting with the New Democrat Coalition at the U.S. Capitol in Washington, D.C., on June 6, 2023.
Nathan Howard | Bloomberg | Getty Images
JPMorgan Chase is set to release its second-quarter results before the opening bell on Friday, signaling the beginning of the banking industry’s earnings season.
JPMorgan’s earnings reports, as the largest bank in the US by assets, are closely monitored by investors for insights into the performance of other lenders.
Here are the analysts’ estimates for JPMorgan’s second-quarter results:
- Earnings: $4 per share, according to Refinitiv
- Revenue: $38.96 billion, according to Refinitiv
- Trading revenue: Fixed income $4.12 billion, equities $2.41 billion, according to StreetAccount
- Investment banking revenue: $1.42 billion
- Net interest income: $21.21 billion
JPMorgan has outperformed its smaller peers in several areas, including deposits, funding costs, and net interest income, since the regional banking crisis began in March. This has contributed to an 11% increase in the bank’s shares this year, compared to a 16% decline in the KBW Bank Index. Following its last earnings report in April, JPMorgan experienced its largest earnings-day increase in two decades.
This time, JPMorgan’s acquisition of First Republic in early May, which added $203 billion in loans and securities and $92 billion in deposits, may provide some protection against the challenges faced by the industry, such as the loss of low-cost deposits and rising funding costs.
These challenges have put pressure on the industry’s profit margins, with several regional banks reporting lower-than-expected interest revenue last month, and more banks expected to experience the same in the coming weeks. Additionally, banks are likely to disclose a slowdown in loan growth and increased costs related to commercial real estate debt, all of which will impact their bottom lines.
As a result of expectations for a slowing economy, lenders have started setting aside more loan-loss provisions. JPMorgan is expected to post a $2.72 billion provision for credit losses, according to the StreetAccount estimate.
The bank will also face challenges in trading and investment banking activities, with a projected 15% decline in revenue from those areas compared to the previous year.
Moreover, analysts will be interested in hearing JPMorgan CEO Jamie Dimon’s perspective on the state of the economy and his expectations for banking regulation and consolidation.
Wells Fargo and Citigroup will also announce their results later on Friday, while Bank of America and Morgan Stanley will report on Tuesday. Goldman Sachs will disclose its results on Wednesday.
This story is developing. Please check back for updates.
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