JPMorgan beats profit estimates on investment banking boost
Business
JPMorgan beats profit estimates on investment banking boost
(Reuters) - JPMorgan Chase (JPM.N), opens new tab beat estimates for second-quarter profit on Friday, as its investment banking business benefited from a resurgence in dealmaking and strong capital market activity.
More companies are tapping capital markets to raise funds and striking takeover deals as they become confident in the U.S. economy's ability to avoid a major downturn, helping boost Wall Street banks' income from fees.
Investment banking fees grew 50%, compared with a low base, but were higher than the company's earlier prediction of 25% to 30%.
"While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks," CEO Jamie Dimon said, adding that the risks included a changing geopolitical situation, which remains the most dangerous since World War II.
Inflation and interest rates may stay higher than market expectations due to threats like large fiscal deficits and restructuring of trade, Dimon said.
The largest U.S. bank set aside $3.1 billion in provisions for credit losses, 62% higher than the first quarter.
High rates continued to benefit lending, with net interest income (NII) - the difference between what it earns on loans and pays out on deposits - rising 4% to $22.9 billion.
