On Tuesday, JPMorgan Chase became the first major lender to report earnings for the second quarter that ended in June. Importantly, the bank’s profit for that quarter surpassed analysts’ expectations on record trading revenue, bolstered by surging volatility as well as the Federal Reserve’s actions to boost credit markets.
JPMorgan Chase posted earnings of $4.69 billion or $1.38 a share. Importantly, analysts expected, that earnings to reach $1.04 per share. Revenue also exceeded expectations. In the second quarter, the revenue was $33 billion.
Shares of JPMorgan Chase gained 1.4% in early trading on Tuesday. In the premarket, shares jumped as much as 4%.
Major bank and financial results
JPMorgan Chase is the biggest bank in the U.S. when it comes to assets. Moreover, the New York-based bank is the first major lender to report earnings for the second quarter. It is worth mentioning that, the company is closely watched to learn more about the impact of the coronavirus pandemic on banks’ retail and institutional businesses.
Notably, the company allocated $8.9 billion for expected loan losses across the firm. This decision affected the results of the lender’s giant retail bank. However, better-than-expected revenue in its Wall Street operation helped to limit the impact.
In the second quarter, markets revenue jumped by 79% to a record of $9.7 billion, bolstered by strong fixed-income trading.
Moreover, bond traders posted revenue of $7.3 billion. Consequently, compared to the same period of time in 2019 revenue jumped by 120%. Also, equities traders posted revenue of $4.2 billion. This result also surpassed expectations.
However, the retail banking division posted a $176 million loss compared to a year ago. Last year, the retail banking division posted a $4.2 billion profit.
Low-interest rates pressured net interest margin, which is a key measure of profitability in the banking sector. This factor has a negative impact on bank stocks.