JPMorgan (JPM) Chase reported strong Q3 2024 earnings, with revenue reaching $42.65 billion, a 7% year-over-year increase, surpassing analyst expectations of $41.6 billion. Managed revenue also grew to $43.3 billion, up 6% from last year. Despite a slight dip in net income to $12.9 billion (a 2% decrease), earnings per share (EPS) improved to $4.37, beating market expectations.
Key drivers included a 29% increase in investment banking revenue, buoyed by higher fees, and asset and wealth management (AWM) performance, with assets under management rising 23% to $3.9 trillion. Net interest income rose by 3% to $23.5 billion, although rising deposit costs have affected profitability. Non-interest revenue grew by 11%, driven by increased asset management fees and investment banking activities.
JPMorgan also raised its outlook for net interest income in the coming quarters, expecting to benefit from lower deposit costs and potential growth in investment banking【11†source】【12†source】【13†source】.
CEO of Chase Jamie Dimon looks on as he attends the seventh “Choose France Summit”, aiming to attract foreign investors to the country, at the Chateau de Versailles, outside Paris, on May 13, 2024.
Lucovic Marin | Getty Images
JPMorgan (JPM) Chase posted third quarter results that topped estimates for profit and revenue as the company generated more interest income than expected.
Here’s what the company reported:
- Earnings: $4.37 a share vs. $4.01 a share LSEG estimate
- Revenue: $43.32 billion, vs. $41.63 billion estimate
JPMorgan said profit fell 2% from a year earlier to $12.9 billion, while revenue climbed 6% to $43.32 billion. Net interest income rose 3% to $23.5 billion, exceeding the $22.73 billion StreetAccount estimate, on gains from investments in securities and loan growth in its credit card business.
The bank’s results were also helped by its Wall Street division. Investment banking fees climbed 31% to $2.27 billion in the quarter, exceeding the $2.02 billion estimate.
Fixed income trading generated $4.5 billion in revenue, unchanged from a year earlier but topping the $4.38 billion estimate. Equities trading jumped 27% to $2.6 billion, edging out the $2.41 billion estimate.
The biggest American bank has thrived in a rising rate environment, posting record net income figures since the Fed started hiking rates in 2022.
Now, with the Fed cutting rates, there are questions as to how JPMorgan will navigate the change. Like other big banks, it’s margins may be squeezed as yields on interest-generating assets like loans fall faster than its funding costs.
Last month, JPMorgan dialed back expectations for 2025 net interest income and expenses, and analysts will want more details on those projections.
Analysts will also want to hear JPMorgan CEO Jamie Dimon’s thoughts about the upcoming U.S. election and the industry’s efforts to push back against an array of regulatory moves to rein in fees and force banks to hold more capital.
Shares of JPMorgan (JPM) have jumped 25% this year, exceeding the 20% gain of the KBW Bank Index.
Wells Fargo is scheduled to release results later Friday, while Bank of America, Goldman Sachs, Citigroup and Morgan Stanley report next week.
JPMorgan Chase’s Q3 2024 financial results showed that despite a slight decline in net income of 2% year-on-year, the company’s performance remained strong, especially in the investment banking and asset management sectors. Earnings per share (EPS) reached $4.37, beating market expectations. Higher revenues, especially from the investment banking division which rose 29%, showed a significant recovery amid global economic uncertainty.
Net interest income also increased by 3%, largely driven by asset management and reallocation of investment portfolios. However, higher interest costs due to higher deposits have begun to put pressure on profit margins. Nevertheless, JPMorgan remains optimistic about the future outlook for net interest income, indicating that the company is able to weather the ongoing high interest rate challenges.
On the other hand, JPMorgan demonstrated its ability to capture growth in assets under management, which increased by 23%, driven by net inflows and market gains. This performance is important in reflecting investor confidence in JPMorgan’s wealth management services, despite economic volatility.
However, the 4% increase in non-interest expenses, mainly related to employee compensation, suggests that JPMorgan needs to continue to monitor operational efficiency to avoid excessive cost pressures in the future. Amid uncertain economic trends, including rising credit costs, the company needs to ensure that profitability growth is balanced with tight cost controls【12†source】【13†source】.
Overall, despite some challenges, JPMorgan remains one of the leading banks that is capitalizing on various growth opportunities, especially in investment banking and wealth management, while adapting to the changing economic environment.
This story is developing. Please check back for updates.