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JPMorgan Chase’s Top-Line Growth Could Outperform Its Peers

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Analysts’ estimate

Analysts expect JPMorgan Chase (JPM) to maintain its growth momentum in the fourth quarter and post revenues of ~$27 billion, which implies ~6% growth YoY (year-over-year). Loan growth, a higher deposit margin, and increased non-interest income are expected to support the top-line growth.

In comparison, Citigroup’s (C) fourth-quarter revenues are expected to increase ~3% due to loan book expansion and higher deposit margins. An expected sequential slowdown in equity and fixed income market revenues could remain a drag. Bank of America’s (BAC) revenues are expected to increase 4.4% in the fourth quarter due to the higher net interest income from increased interest rates and deposit and loan growth. However, Wells Fargo’s (WFC) top line is projected to remain weak.

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Growth drivers

JPMorgan Chase’s top line will likely benefit from the continued strength in its Consumer and Community Banking segment. The higher net interest income, higher deposits and card margins, and loan book expansion are expected to drive the bank’s revenues. During the last quarter, JPMorgan Chase reported 2% growth in average loans and 6% growth in core loans. The deposits grew 4%.

Weak market conditions are pressuring JPMorgan Chase’s Corporate and Investment Bank segment. However, the bank continues to outperform its peers in this segment. Higher equity underwriting fees and growth in Treasury and Securities Services revenues, led by higher rates and operating deposit growth, are driving the segment’s top line.

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