[NEW YORK] JPMorgan Chase topped first-quarter profit estimates on Friday (Apr 11), driven by record equities trading and higher fees from debt underwriting and merger advisory.
CEO Jamie Dimon, however, remained circumspect on the economy as corporate America navigated the fallout of President Donald Trump’s tariffs, which have raised inflationary risks and fears of recession.
“Clients have become more cautious amid an increase in market volatility driven by geopolitical and trade-related tensions,” Dimon said. “The economy is facing considerable turbulence, including geopolitics.”
The results from the biggest US bank offer a glimpse into the economic implications of Trump’s trade agenda. While his return to the White House boosted business optimism in the first quarter, policy uncertainty has upended those hopes.
The administration last week unveiled steep reciprocal tariffs on dozens of countries, only to pause many of them on Wednesday. Since the tariffs were first announced, JPMorgan’s shares have dropped around 8 per cent and hit a seven month-low earlier this week.
The bank increased its provisions for credit losses to US$3.3 billion from US$1.9 billion last year. Consumers and businesses could struggle to repay their loans if the new import levies reignite inflation and dampen economic growth.
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Earnings were US$14.6 billion, or US$5.07 a share, for the three months ended March 31, JPMorgan said. That compares with US$13.4 billion, or US$4.44 a share, a year earlier.
Excluding one-time costs, the bank earned US$4.91 per share, higher than estimates of US$4.61, according to data compiled by LSEG.
Heightened volatility in the first quarter due to shifting expectations lifted the bank’s trading business as investors quickly adjusted their portfolios.
Trading revenue climbed 21 per cent to US$9.7 billion, higher than the earlier expectations of a low double-digits percentage gain. Equities trading surged 48 per cent to a record US$3.8 billion.
Investment banking fees climbed 12 per cent to US$2.2 billion, helped by stronger debt underwriting and advisory fees.
US consumer confidence plunged to the lowest level in more than four years in March amid mounting worries of a recession and higher inflation because of the tariffs.
Analysts have also warned that escalating tensions between the US and China, which was not offered a reprieve when Trump paused most of his reciprocal tariffs, could upend supply chains and trigger price hikes.
On Monday, Dimon warned shareholders that trade wars could have lasting negative consequences including persistent inflation and high fiscal deficits.
That could strain the financial health of consumers and increase risks of loan defaults.
Still, net interest income (NII) – the difference between what the bank earns on loans and pays out on deposits – rose 1 per cent to US$23.4 billion.
The bank said it expects NII to be US$94.5 billion for the full year, higher than the US$94 billion earlier. The guidance for NII, excluding markets, remained unchanged at US$90 billion. REUTERS
