JPMorgan Chase & Co. (JPM) shares are trading higher in premarket trading after the financial giant delivered a strong performance in the third quarter of fiscal year 2024. The bank reported revenue of $42.654 billion, a 7% increase year-over-year, surpassing the consensus estimate of $41.649 billion. This robust growth was driven by a combination of factors, including a surge in investment banking activity and solid performance in asset management.
Investment banking revenue soared 29% year-over-year, reaching $2.4 billion. This impressive growth was fueled by a 31% increase in investment banking fees, driven by strong demand across all products. Asset and Wealth Management (AWM) also contributed significantly to the positive results, with revenue rising 9% year-over-year to $5.4 billion. This growth was supported by higher market levels and continued net inflows, leading to a 23% increase in client assets, reaching $5.7 trillion.
Despite the strong revenue growth, net income declined 2% year-over-year to $12.90 billion in the quarter. However, earnings per share (EPS) came in at $4.37, exceeding the consensus estimate of $4.00. The bank’s capital position remains robust, with a CET1 capital ratio of 15.3% and an advanced CET1 capital ratio of 15.5%. JPMorgan also announced a dividend per share of $1.25 and a share repurchase of $6.0 billion.
While the results were positive, CEO Jamie Dimon highlighted several challenges that continue to weigh on the global economy. Dimon expressed concerns about geopolitical tensions, citing recent events as evidence of a worsening global landscape. He also pointed to persistent economic headwinds, including large fiscal deficits, infrastructure needs, and a reshaping of global trade patterns.
Despite the challenges, JPMorgan remains optimistic about its future prospects. The bank raised its forecast for net interest income, excluding Markets, to ~$92.5 billion for fiscal year 2024, up from ~$91 billion previously. The bank also maintains its projection for a card services non-performing loan (NCO) rate of ~3.40%.
Investors seeking exposure to JPMorgan can consider ETFs such as the IShares U.S. Financial Services ETF (IYG) and the SPDR Select Sector Fund – Financial (XLF).
