JPMorgan Chase posts stellar first quarter amid strong loan growth and trading revenue

JPMorgan Chase reported first-quarter earnings and revenue that easily topped estimates, lifted by better-than-expected loan growth and trading sales.

“We are off to a good start for the year with all of our businesses performing well and building on their momentum from last year,” CEO Jamie Dimon said in a statement.

“U.S. consumers and businesses are healthy overall and with pro-growth initiatives and improving collaboration between government and business, the U.S. economy can continue to
improve,” he said.

  • EPS: $1.65 versus $1.52 expected by Thomson Reuters analysts’ consensus
  • Revenue: $25.586 billion versus $24.877 billion expected by Thomson Reuters analysts’ consensus
  • Trading revenue: $6.515 billion versus $5.51 billion expected by StreetAccount analysts’ consensus
  • Average core loans: up 9 percent year over year versus an expected uptick of 2 percent
Jamie Dimon, chairman and chief executive officer of JPMorgan Chase

Laura McDermott | Bloomberg | Getty Images
Jamie Dimon, chairman and chief executive officer of JPMorgan Chase

JPMorgan reported earnings per share of $1.35 on sales of $24.08 billion in the year-earlier period.

The company’s shares rose more than 1 percent in the premarket after the results were released.

“The investment banking business was very strong year over year and up slightly from the fourth quarter” of 2016, said Ken Leon, global director of industry and equity research at CFRA. He also recognized the company’s loan growth remains strong. “There really weren’t any major blemishes in this report.”

The company’s trading revenue was largely bolstered by strong sales in its “markets” segment, which rose 13 percent. Trading revenue totaled $6.515 billion in the first quarter, more than a billion above StreetAccount’s estimate.

Bond trading was also one of the main drivers behind the results, rising 17 percent from the same quarter a year ago. “Rates improved, with increased market activity, particularly in Europe in advance of upcoming elections and in reaction to central bank actions,” JPMorgan said in a statement.

The banking giant’s stock has surged more than 20 percent since the election amid hopes for a revamp of financial regulations and lower corporate taxes coming from Trump administration policies.

JPMorgan shares are down 1 percent for the year, however, as investors see the implementation of such moves as being further off.

Dimon said in his annual letter to investors that businesses are being weighed down by regulations, adding high U.S. corporate taxes are making companies less competitive. The U.S. had one of the highest corporate tax rates in the world last year at 40 percent.

Dimon also said “too big to fail” fears have been eradicated, lessening the need for current regulations like Dodd-Frank.

JPMorgan shares in 2017

Source: FactSet

Wells Fargo and Citigroup also reported quarterly results on Thursday.

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