JPMorgan posts robust second quarter numbers, although Dimon warns of tariff, geopolitical danger

WASHINGTON (AP) — JPMorgan’s second-quarter revenue fell to $15 billion in second quarter, however the New York financial institution beat Wall Road expectations. CEO Jamie Dimon on Tuesday touted one other robust efficiency by the financial institution, significantly its markets division, the place income rose by 15% to $8.9 billion.

JPMorgan earned an adjusted $5.24 per share within the interval, beating the $4.48 analysts have been calling for however down from final yr’s $6.12 per share. Excluding the one-time gadgets, JPMorgan earned $4.96 per share within the interval.

The financial institution’s revenue was off considerably from the identical interval a yr in the past, largely as a result of JPMorgan cashed in $7.9 billion value of its holdings in Visa in final yr’s second quarter.

Dimon mentioned the U.S. financial system remained resilient within the second quarter, highlighting tax reform and the potential for extra deregulation. Nevertheless, he famous that loads of dangers stay, together with commerce uncertainty, geopolitical conflicts and federal authorities deficits.

“The finalization of tax reform and potential deregulation are optimistic for the financial outlook, nevertheless, important dangers persist — together with from tariffs and commerce uncertainty, worsening geopolitical situations, excessive fiscal deficits and elevated asset costs,” Dimon mentioned in ready remarks.

Dimon usually weighs in on international and financial points that transcend the scope of banking. He’s seen because the banker that Washington and international leaders can flip to for recommendation, solicited or unsolicited. His feedback are likely to reverberate by way of Washington and Company America.

JPMorgan’s internet curiosity earnings, the distinction between the curiosity the financial institution takes in on its mortgage portfolio and the curiosity in pays out on buyer deposits, rose 2% to $23.3 billion. That was barely under expectations.

The nation’s largest banks have benefited from greater rates of interest for the final two years, however many analysts have been anticipating the Federal Reserve to chop its benchmark lending price as much as two occasions this yr, which might usually be anticipated to ding the banks’ backside line.

Nevertheless, one other report Tuesday confirmed that U.S. inflation rose in June to its highest stage since February as President Donald Trump’s sweeping tariffs pushed up the prices of a spread of products. Larger inflation would doubtless fortify the Federal Reserve’s reluctance to chop its short-term rate of interest, one thing that Trump has been loudly demanding.

Massive U.S. banks — and their shareholders — are additionally more likely to proceed to learn from dialed down regulation underneath the Trump administration. That applies significantly to decrease capital necessities, the amount of money a financial institution reserves within the occasion of an financial calamity.

Final month, all the key banks handed the Federal Reserve’s annual “stress checks” of the monetary system, however the take a look at carried out by the central financial institution was notably much less vigorous than it had been in earlier years.

The Fed mentioned it went with a gentler take a look at as a result of the worldwide financial system has weakened since final yr, and due to this fact the take a look at tends to weaken.

Decrease capital requirement leaves the banks with rather more money, which they usually use to boost dividends and purchase again shares of their very own inventory.

JPMorgan, amongst different banks, raised its dividend and repurchased greater than $7 billion value of its personal inventory final quarter.

JPMorgan mentioned as of the tip of the second quarter, it was holding $1.5 trillion in money and marketable securities.

JPMorgan’s complete managed income hit $45.7 billion, additionally beating expectations however under final yr’s $51 billion. Wall Road was anticipating income just below $44 billion.

Shares of JPMorgan have been successfully flat earlier than the bell Tuesday, whereas broader U.S. markets rose modestly.

Wells Fargo additionally reported its second-quarter earnings early Tuesday, beating Wall Road’s revenue and income targets. Wells posted internet earnings of $5.5 billion within the interval. That works out to a revenue of $1.60 per share, beating the $1.41 analysts anticipated and the $1.33 from the identical quarter a yr in the past.

Nevertheless, buyers have been discouraged by the San Francisco financial institution’s outlook, significantly its trimmed internet curiosity earnings steerage, and its shares fell 3.6% in premarket buying and selling.

Citigroup additionally beat Wall Road’s projections on Tuesday, incomes $1.96 per share on $21.7 billion in income. Analysts have been forecasting revenue of $1.61 per share on income of $21 billion.

Citi mentioned it returned $3 billion in capital to shareholders throughout the newest quarter, together with $2 billion value of share repurchases. Citi shares rose 2.6% earlier than the bell.