JPMorgan Earnings Top Estimates on Higher Trading revenue and Loan Growth

On Thursday, JPMorgan Chase (NYSE: JPM) posted second-quarter earnings that topped analysts’ estimates, driven by higher trading revenue and better cost control. 

The biggest U.S. bank by assets said the second-quarter profit fell 1.4 percent to $6.2 billion, or $1.55 a share, compared with a profit of $6.29 billion, or $1.54 a share, a year earlier. Excluding certain items, earnings were $1.46 a share. The result beat analysts’ estimates. Analysts polled by Thomson Reuters had projected a profit of $1.43 per share.

The bank also reported better-than-expected revenue. Revenue during the quarter rose 2.8 percent to $25.2 billion, beating analysts’ estimate of $24.5 billion.

Shares of the company rose more than 2 percent in the early trading.

The robust earnings were driven by a surge in trading revenue and loan growth. The company said trading revenue jumped 23 percent to $5.56 billion in the second quarter. Fixed-income trading revenue rose $35 percent to $3.96 billion while stock-trading revenue rose 1.5 percent to $1.6 billion. The company also said average core loans increased 16 percent from a year earlier. 

The company also do a better job in controlling the cost. Non-interest expenses decreased 5.9 percent to $13.64 billion from $14.5 billion a year earlier, thanks to cost cutting and lower legal bills.

Although the second-quarter earnings were good, analysts are still cautious about the impact of Brexit on big banks. Chief Financial Officer Marianne Lake said that the impact of Brexit will take time and it is too early to know for sure what will happen with the bank’s employee base in the U.K.

JPMorgan kicked off bank earnings season. Citigroup Inc. and Wells Fargo & Co. will report their results on Friday, while Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley are scheduled next week.

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