JPMorgan Chase Generates Record Second Quarter Revenue While Setting Aside $ 10.5 Billion For Potential Loan Losses
Although he had to set aside nearly $ 10.5 billion to cover potential future loan losses, JPMorgan Chase (NYSE: JPM) generated nearly $ 4.7 billion in second-quarter profits ($ 1.38 earnings per share), beating most estimates. That’s down about 51% from the second quarter of 2019, but up 77% from the first quarter of the year.
America’s largest bank generated total revenue of around $ 33.8 billion, its highest quarterly revenue on record.
This quarter’s allowance is also higher than the roughly $ 8.3 billion that JPMorgan set aside to cover potential future loan losses last quarter.
Revenues and profits were strongly supported by corporate and investment banking, which generated nearly $ 5.5 billion in profits on net sales of nearly $ 16.4 billion.
“Despite some recent positive macroeconomic data and decisive and meaningful government action, we still face many uncertainties about the future of the economy,” CEO Jamie Dimon said in a statement. “However, we are prepared for all eventualities as our fortress record allows us to remain a port in the storm.”
Net write-offs – debt unlikely to be collected by the bank, a good indicator of final write-offs – remained low for the quarter at $ 1.6 billion, up slightly from $ 1.4 billion in write-offs net in the second quarter of 2019.
While net expenses remain low, problems still loom on the horizon.
Total non-performing assets, which largely consist of loans that have not received payment for at least 90 days, reached $ 8.4 billion at the end of the second quarter, up 60% from compared to the second quarter of last year and 35% more than the first quarter of this year.
There are also still many borrowers in deferral regime, including 7.4% of borrowers in car loan portfolio and 6.9% of borrowers in mortgage portfolio.
The bank’s basic Tier 1 capital ratio (a measure of a bank’s core capital to total risk-weighted assets and a measure closely monitored by regulators) increased to 12.4 % at the end of the quarter, compared to 11.5% at the end of last year. trimester.
This will give JPMorgan some respite from its new CET1 ratio required of 11.3% in October.
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