Record JPMorgan Bargaining Helps Reduce Pandemic Profit Bottom Line

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The results of JPMorgan Chase & Co. were another marker of the disconnect between the buzzing markets and concerns about the US economy.Largest US bank said second-quarter profit fell 51% to $ 4.69 billion, less than expected, as record trading revenues helped counter the largest provision for loan losses in the history of the business. This is the second consecutive quarter that trade has set a record, as the bank’s Wall Street unit helps support a consumer credit division struggling with business closings and an increase in the number of unemployed.

The firm’s fixed income trading revenues doubled compared to the previous year and the equity market jumped more than 30% as trading offices benefited from a roller coaster year . After the pandemic pushed stocks toward the fastest bear market of all time in March, the S&P 500 held one of the largest rallies in nine decades, spurred by stimulus and optimism. a rapid economic rebound.

“We are ready for any eventuality because our fortress record allows us to remain a port in the storm,” said President and CEO Jamie Dimon in a statement. “This is why we can continue to serve all of our stakeholders and pay our dividend – unless the economic situation deteriorates significantly and significantly.”

JPMorgan was the only major Wall Street bank to have had no losses during the financial crisis, and second quarter results provide a glimpse of what will happen when the other major US lenders report this week. The combined profits of the four largest US banks are expected to have fallen to more than a decade low in the second quarter, according to analyst estimates compiled by Bloomberg before Tuesday’s results.

The bank generated US $ 9.7 billion from trading stocks and bonds, 79% more than a year earlier, more than analysts expected. This and a 91% gain in investment banking fees helped the bank remain easily profitable even though it set aside a record $ 10.5 billion to cover future bad debts, more than what analysts were waiting.

JPMorgan rose 3% at the start of the session at 7:05 am in New York. The stock fell 30% this year until Monday.

Despite the surprise profit victory, JPMorgan’s balance sheet shows more signs of stress than at the end of the first quarter, when home orders were only a few weeks old. Net allocations, delinquent loans that the bank no longer expects to collect, increased 6% from the first three months of the year to $ 1.56 billion in the second quarter, much less than the 2.78 billion dollars forecast by analysts. the surge was even stronger in the second half of the year, as the effects of the government’s stimulus measures and the bank’s loan deferral programs began to dissipate.

Other key results:

  • Second-quarter net profit fell to $ 4.69 billion, or $ 1.38 a share, from $ 9.65 billion, or $ 2.82, a year earlier. This exceeded the average estimate of US $ 1.01 per share of 25 analysts polled by Bloomberg.
  • Income from fixed income underwriting rose 55% to $ 1.27 billion as companies rush to borrow after Fed implements unprecedented series of programs to support markets of corporate debt and lower interest rates.



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