JPMorgan CEO, Jamie Dimon. Brian Snyder/Reuters
JPMorgan announced Wednesday third quarter earnings that beat analyst profit estimates.
M&A advisory fees almost tripled in the same period, pushing quarterly net income up to $11.7 billion.
The bank also released $2.1 billion in reserve funds and received a $566million income tax benefit. This helped to boost its earnings.
JPMorgan Chase announced Wednesday its third quarter earnings that exceeded analyst expectations. This was due to a strong performance by its investment banking division.
The bank with the largest US market share posted a 24% increase in profits over a year ago. It reported quarterly net income of $11.7 million, or $3.74 per shares, for the September quarter. According to Bloomberg poll, this beat Wall Street analysts' expectations of $8.9 billion or $2.98 per Share.
These figures are comparable to earnings of $11.9billion and $3.78 per share for the preceding quarter and of $9.4billion and $2.92 per shares in the same period last fiscal year.
M&A advisory fees almost tripled in the same period. They jumped 52% to drive the profit beat.
For a $1.5 billion benefit, the bank also released $2.1 billion in reserves to pay for bad loans that could have arisen during the pandemic. It also booked $524 millions in quarterly net charge-offs. JPMorgan's quarterly net profit was $9.6 billion, excluding those boosts.
These are the key quarterly numbers
Earnings per Share: $3.74, vs. $2.98 anticipated, and $2.92 last year.
$3.74 vs. expected $2.98 and $2.92 last year. Net Revenue: $30.4 Billion vs. $29.9 Billion expected and $29.2B a year ago.
JPMorgan is considered a bellwether business - its earnings are indicative of the state of the US economy, as it continues to reopen following pandemic restrictions. For indications on the industry's performance, JPMorgan's third quarter financial update will be examined by Wall Street banks.
Jamie Dimon, chairman and CEO of JPMorgan Chase, stated in a statement that "JPMorgan Chase delivered solid results as the economy continued to show good growth - even the dampening affect of the Delta variant supply chain disruptions"
He said, "We released credit reserves in the amount of $2.1 billion as the economic outlook continues its improvement and our scenarios have improved accordingly."
Analysts were eager to see updates on the trading and advisory divisions of the bank ahead of the earnings report. The pandemic saw a boom in trading and IPO issuance as well as mergers, which led to high fees for the investment bank.
From $29.26 billion last year, the lender's third quarter revenue rose by 1% to $29.65 trillion. Bloomberg polled analysts and predicted $29.9 billion.
JPMorgan's investment bank arm did well, with $1.3 billion in revenue, an increase of 60% over the previous year. This is a sign of the strength of the mergers-and-acquisition market.
These gains were offset by the effects of market normalization, reduced volatility and a decrease in trading activity to some degree, said the bank.
The bank's total markets revenue fell 5% to $6.3billion, while fixed income markets declined 20%. According to the bank, this was due to lower revenues in commodities, rates and spread products than 2020. The solid performance of all products drove a 30% increase in revenue for the equity market division to $2.6 billion.
JPMorgan stock rose 0.3% Wednesday premarket session, to $166 per Share. It is now up 30% this year.
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