Menu
Banking Exchange Magazine Logo
Menu

JP Morgan Bank Earnings Beat Expectations, What it Means for Banks

The bank outperforms its rivals.

  • |
  • Written by  Banking Exchange staff
  • |
  • Comments:   DISQUS_COMMENTS
JP Morgan Bank Earnings Beat Expectations, What it Means for Banks

Third quarter profits rose an impressive 8% year over year with 9.1 billion in quarterly profit. Just as impressive, the bank did not grow by cost cuts as the revenue also grew at the same pace. Analysts were off by $1.6 billion in revenue estimates.

The growth came primarily from the retail sector of the bank that included credit cards and loan business. JP Morgan, perhaps best known for its investment banking side, has done well across the board.

The stock rose more than three percent on the news. While investors in banks anticipate a challenge in profit margins due to lower interest rates, it was ironic that JP Morgan actually sited their consumer side as the catalyst for growth.

The bank has bucked the trend of banking stocks that have trailed the S&P index in terms of performance. Perhaps the bank lowered expectations by warning the negative effect lower interest rates might have on earnings.

In a press release, Jamie Dimon said, “The consumer remains healthy with growth in wages and spending combined with strong balance sheets and low unemployment levels. This is being offset by weakening business sentiment and capital expenditures mostly driven by increasingly complex geopolitical risks, including tensions in global trade.”

Net interest income also bucked the trend compared with other banks exceeding $14 billion. Dimon also mentioned that consumers are paying debt off on time at a reasonable clip despite borrowing more.

On a related note, reports show that the housing market is showing signs of limited inventory, which could be a potential sign for value growth in the real estate sector. The reports do not necessarily help the banking industry, however, as the mortgage business could still be driven primarily by refinancing at lower long term interest rates by home owners rather than new owners entering into the market.

Dimon’s statement also continued to have words of overall caution, mentioning the geopolitical climate. The market does not like uncertainty, and having a president that could be impeached in the same year as a presidential election could rattle the markets despite the recent trend of the stock market being immune to political turmoil.

back to top

Sections

About Us

Connect With Us

Resources

Webinar: From KYC to IDV

How three leading banks are utilizing cutting-edge
digital tools to onboard, win, and wow customers

Time/Date: June 23, 2021 11:00 a.m. ET

Digital adoption, already moving at warp speed, accelerated seven years into the future during the COVID-19 pandemic. As the number of bank branches continues to fall, with at least one study predicting all branches will disappear by 2034 (Fox Business) and foot traffic declining (Vox), today’s most innovative banks are charting a new, digital-first path to win over customers while increasing security, meeting KYC compliance requirements, and winning customers to drive revenue.

In this webinar, you’ll hear from John Baird, Founder & CEO of Vouched, Tyler Crawford, COO of Bankers Healthcare Group, Anand Sathiyamurthy, CPO of Flagstar Bank and Daniel Sheehan, Chairman & CEO of Professional Bank as they describe their vision for digital transformation and how customer expectations are changing to digital first. They’ll also explore how fostering an innovation mindset creates new ways to tackle complex KYC problems and allows them to quickly compete in new markets and win customers.

REGISTER NOW!

This webinar is brought to you by:
Vouched Logo