JPMorgan Chase is one of the major banks in the country. Moreover, it is the biggest bank in the U.S. in terms of assets. JPMorgan Chase was the first major lender to report earnings for the second quarter.
People should remember that JPMorgan Chase is worth closely watching for clues on how the coronavirus pandemic is impacting banks’ retail and institutional businesses.
The company allocated $8.9 billion for expected loan losses across the firm. This move had a negative impact on the results of the lender’s giant retail bank. Nevertheless, better-than-expected revenue in its Wall Street operation helped offset some of the losses.
JPMorgan Chase and interesting details
On July 14, it became the first major lender to report earnings for the second quarter, ending several weeks ago in June.
Importantly, the profit for the second quarter exceeded analysts’ expectations on record trading revenue, supported by surging volatility and the Federal Reserve’s actions to boost credit markets.
Interestingly, market revenue grew by 79% to a record $9.7 billion, bolstered by strong fixed-income trading.
Furthermore, bond traders posted revenue of $7.3 billion. As a result, compared to the same period of time last year, revenue jumped by 120%. Moreover, equity traders posted a revenue of $4.2 billion. This result was higher than expected.
Unfortunately, the retail banking division posted a $176 million loss compared to the same period of time in 2019. As a reminder, last year the retail banking division posted a $4.2 billion profit.
Low-interest rates applied pressure on the net interest margin, a key measure of profitability in the banking sector. This is a serious challenge for bank stocks.
Last but not least, in the second quarter, JPMorgan Chase posted earnings of $4.69 billion or $1.38 a share. Revenue also surpassed expectations. The bank’s revenue reached $33 billion.
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