JPMorgan Chase’s second-quarter earnings miss as investment banking fees fall (NYSE:JPM)

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Mario Tama

JPMorgan Chase (NYSE:JPM) Q2 EPS missed the consensus estimate on Thursday as global investment banking fees slipped amid “a challenging macro environment”, more than offsetting strong consumer spending from its consumer banking business and gains year-over-year of its commercial banking unit.

The JPM stock is 2.6% drop in Thursday’s pre-market trading.

The company has temporarily suspended share buybacks as it builds up capital to meet higher requirements set following its recent stress test.

For the year 2022 JPMorgan (JPM) boosted its forecast for corporate and investment banking non-market net interest income at $58B+ from a previous estimate of $53B+. The company maintains its outlook for adjusted non-interest expense for 2022 at around $77 billion in April. The net card charge rate for fiscal year 2022 is expected to be below 2%.

Q2 EPS of $2.76 vs $2.91 consensus; compared to $2.63 in the first quarter of 2022 and $3.78 in the year-ago quarter.

Provision for credit losses of $1.10 billion compared to $1.46 billion in Q1 and profit of $2.29 billion in Q2 2021.

Total noninterest expense of $18.7B in Q2 versus $19.2B in Q1 and $17.7B in Q2 2021.

The return on tangible common equity was 17% compared to 16% in the prior quarter and 23% in the prior year quarter.

Q2 revenue and net income by segment:

  • Consumer & Community Banking revenue of $12.6 billion versus $12.2 billion in the first quarter and $12.8 billion in the prior year quarter; net income of $3.10 billion fell 45% from the first quarter and increased 7% from a year ago;
  • Corporate and investment banking revenue of $11.9 billion fell 12% Q/Q and 10% Y/Y; Banking revenue of $3.22 billion fell 37% year-on-year and Markets and Securities revenue of $8.72 billion rose 8% year-on-year; CIB’s net income of $3.73 billion fell 15% Q/Q and 26% Y/Y;
  • Commercial banking revenue of $2.68 billion increased 12% Q/Q and 8% Y/Y; net income of $994m increased 17% quarter-on-quarter and fell 30% year-on-year.
  • Asset and Wealth Management revenue of $4.31 billion was little changed from the first quarter and increased 5% year-on-year; net income of $1.00 billion roughly flat Q/Q and fell 13% year-on-year.

JPMorgan’s (JPM) total loans were $1.10T at the end of Q2 2022 versus $1.07T at the end of Q1; total deposits of $2.47T vs. $2.56T in Q2-3.

Conference call 8:30 a.m. ET

Earlier, JPMorgan Chase GAAP EPS $2.76 misses $0.13, $30.7 billion revenue misses $1.12

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