JPMorgan Chase more than doubled its quarterly profit as the US economy bounced back from the pandemic and the mega-bank continued to release reserves it had set aside for possible loan defaults.
The nation’s biggest bank reported profit of $11.95 billion or $3.68 a share — beating analysts’ expectations of $3.20 a share and more than doubling profits from a year earlier, when the bank reported $4.69 billion or $1.38 a share.
The profit jump stems partly from the fact JPM is now benefiting from the billions it set aside last year to prepare for potential loan defaults by businesses struggling during the pandemic. The bank posted a one-time gain of $2.3 billion from a release of $3 billion in loans.
“This quarter we once again benefited from a significant reserve release as the environment continues to improve,” JPMorgan CEO and Chairman Jamie Dimon said in a statement.
But even as profit surged, revenue cratered 8 percent — dropping from $33.08 billion last year to $30.48 billion this quarter. The pandemic related market volatility of 2020 — which boosted JPMorgan’s trading business — has slowed at the same time lending margins have decreased.
JPMorgan’s investment bank remains strong — hauling in $3.4 billion in fees as dealmaking, IPOs and M&A remain hot. The trading business brought in $6.79 billion — 30 percent lower than trading revenue from the second quarter of 2020.
The commercial bank reported $1.42 billion and asset management brought in $1.15 billion.
On a call with investors, Chief Financial Officer Jennifer Piepszak and Dimon emphasized how they are focused on investing in the future. This includes building out data centers and a cloud presence as well as investing in diversity. Dimon also promised to hire 300 black financial advisors.
“We are executing on our commitments to advance economic opportunity and racial equity and launched a new initiative focused on improving healthcare for our employees and the communities we serve,” Dimon said in a statement.