JPMorgan Chase (NYSE:JPM) is anticipated to report an increase in its Tier 1 common equity ratio in Q2 after failing the Federal Reserve’s annual stress test in 2022. The indicative stress capital buffer at JPM climbed to 4% from 3.2%, while the bank maintained its quarterly dividend at $1.00 per share for Q3. After the results of the stress test were released, CEO Jamie Dimon stated, “We will retain capital to fully satisfy our future regulatory requirements.”
JPM increased its forecast for net interest income in 2022 from $53 billion to $56 billion because it anticipates that NII growth will accelerate throughout the course of the year as a result of the rate increase. The forecast for expenses is still $77B. According to a report by Baird Equity Research, increased rates, securities deployment, and loan growth in the high single digits will all contribute to a rise in the NII. The environment for investment banking fees has remained difficult, and according to the research, Q2 investment banking fees will likely decline by about 45% year over year. Consensus estimates for Q2’s earnings per share are $2.91 and $31.83B (+4.4% Y/Y), respectively.
Analyst Jeffery Harte of Piper Sandler, who has an Overweight (Buy) recommendation on JPM, expects the bank’s Q2 2022 results to gain from rising rates, continued loan growth, and minimal credit losses. However, investors are more concerned about a possible impending recession. As a result, he anticipates that the outlook commentary will “steal the show,” with credit (when and by how much losses may climb), the prospects for sustained loan growth, and the likelihood for investment banking activity levels to rebound being among the main areas of worry.
For the majority of the six largest U.S.-based banks, analysts have been lowering their earnings projections. The strongest performers over the past month were Citigroup and JPMorgan (NYSE:JPM). The Baird research stated, that JPM’s fortress balance sheet and diverse income streams should enable them to generate returns in the majority of economic and regulatory scenarios.
JPM is set to release its Q2 earnings results on Thursday, July 14, before the opening of the market. JPM has exceeded EPS projections 75% of the time and revenue estimates 88% of the time over the past two years.
Over the past three months, there have been six upward and two downward changes to EPS estimates. There have been eight upward revisions to revenue projections and no downward revisions.
About JPMorgan
JPMorgan Chase & Co. is a global American investment bank and financial services holding company based in New York City and incorporated in Delaware. With total assets of US$3.954 trillion in 2022, JPMorgan Chase (NYSE: JPM) is the largest bank in the United States, the largest bank in the world by market capitalization, and the sixth largest bank in the world in terms of total assets.
As a “Bulge Bracket” bank, it is a leading provider of investment banking and other financial services. It is one of the Big Four banks in the United States, with Bank of America, Citigroup, and Wells Fargo. JPMorgan Chase (NYSE: JPM) is a universal bank as well as a custodian bank. The investment banking, asset management, private banking, private wealth management, and treasury services departments all utilize the J.P. Morgan brand. Actual trustee JPMorgan Chase (NYSE: JPM) Bank, N.A. oversees all fiduciary activities within private banking and private wealth management. Chase is used for credit card services in the United States and Canada, retail banking in the United States and the United Kingdom, and commercial banking. The retail and commercial bank as well as the bank’s corporate headquarters are currently located at 383 Madison Avenue in Midtown Manhattan, New York City, as the previous headquarters building, 270 Park Avenue, was demolished and a larger replacement headquarters is being constructed on the same site. The Financial Stability Board considers it to be a systemically important bank.
The current corporation was formerly known as Chemical Bank before acquiring Chase Manhattan and adopting its name. In 2000, Chase Manhattan Corporation and J.P. Morgan & Co. amalgamated to become a modern corporation.
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