Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Despite a massive recession, JPMorgan Chase just posted record revenue

Despite a massive recession, JPMorgan Chase just posted record revenue

JPMorgan has the world's biggest Wall Street bank by revenue, a business that helped it capture opportunities created by the response to the pandemic. Surging volatility and unprecedented steps taken by the Federal Reserve to support credit markets have created the best environment for trading and advising on debt and equity issuance in years.
  • JPMorgan’s corporate and investment bank posted a record $5.5 billion profit for the second quarter, which is more money than most entire banks typically generated before the coronavirus pandemic.

  • The bank’s Wall Street division helped offset losses in two of JPMorgan’s four main businesses, its consumer and commercial bank, as the firm set aside $8.9 billion for expected loan defaults across its operations.

    ***

    JPMorgan Chase managed to throw off the most quarterly revenue in its history at the same time that the U.S. economy is in the throes of a sharp recession.

    The bank posted $33.8 billion in second-quarter revenue, helping it earn a better-than-expected $4.69 billion in profit for the period, because of shrewd moves made under CEO Jamie Dimon to build up its investment bank in the years after the financial crisis.

    JPMorgan is known to most as one of the biggest U.S. retail banks, with a coast-to-coast network of branches that has fueled much of the lender’s dominance over the past decade. Thanks to the coronavirus pandemic, that division has left the company exposed to billions of dollars in potential loan defaults across credit card, mortgage and auto lines.

    But JPMorgan also has the world’s biggest Wall Street bank by revenue, a business that is helping it capture opportunities created by the response to the pandemic. Surging volatility and unprecedented steps taken by the Federal Reserve to support credit markets have created the best environment for trading and advising on debt and equity issuance in years.

    Now, Dimon’s moves to grab market share in trading and investment banking from weakened European rivals like Deutsche Bank are looking especially smart. JPMorgan’s corporate and investment bank posted a record $5.5 billion profit for the second quarter, which is more money than most entire banks typically generated before the coronavirus pandemic.

    The Wall Street division helped offset losses in two of JPMorgan’s four main businesses, its consumer and commercial bank, as the firm set aside $8.9 billion for expected loan defaults across its operations.

    JPMorgan traders exceeded expectations that were already heightened for the quarter after management said in late May that markets revenue was headed for a 50% increase. That figure jumped by 79% to a record $9.7 billion, driven especially by strong fixed income trading.

    Bond traders posted revenue of $7.3 billion, a 120% increase from a year earlier, crushing the $5.84 billion estimate by almost $1.5 billion. Equities traders posted revenue of $2.4 billion, beating the $2.07 billion estimate.

    Investment banking revenue climbed 91% to $3.4 billion on record advisory fees as big corporate clients tapped debt and equity markets at a furious pace to build cash positions amid the uncertainty of the pandemic.

    “We’ve raised record amounts of capital for our clients, advised them on strategic opportunities and helped them navigate the markets, all while facing personal challenges caused by the pandemic,” Daniel Pinto, co-president of JPMorgan and head of the corporate and investment bank, said Tuesday in a staff memo. “It’s difficult to predict what the rest of 2020 will look like, but we do expect to return to more normal activity levels.”

    Meanwhile, JPMorgan’s retail banking division posted a $176 million loss, compared with a $4.2 billion profit a year earlier, driven by the addition of reserves in credit cards and other products. It was a similar story at the firm’s commercial bank, which posted a $691 million loss, compared with a $1 billion profit a year earlier.

    The firm’s asset management division was less impacted by the pandemic, posting an 8% profit decrease to $658 million as it built loan loss reserves.

    As for the path forward, it’s not entirely clear, JPMorgan executives conceded Tuesday. Federal stimulus programs have supported individuals and small businesses in the second quarter, masking the true impact of the pandemic, Chief Financial Officer Jennifer Piepszak said Tuesday on a conference call.

    If a relatively benign scenario emerges, JPMorgan will have too much capital saved and could resume stock buybacks as early as the fourth quarter, Dimon told analysts. If a more severe recession happens, caused by a second wave of infections in the fall, the bank could be forced to cut its dividend, he said.

    “We’re really hitting the moment of truth in the months ahead,” Piepszak said.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×