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JPMorgan Chase Reported Strong Q1 Numbers

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Key takeaways

JPMorgan Chase (JPM) reported stronger-than-expected first-quarter numbers on April 12. The bank beat analysts’ estimate due to its higher net interest income and share buybacks. Analysts expected JPMorgan Chase’s revenues to stay flat in the first quarter, which would reflect lower market revenues.

As expected, JPMorgan Chase’s market revenues fell 17% in the first quarter. However, higher net interest income and growth in non-interest revenues helped the bank beat analysts’ estimate. The higher interest rate and increased loans and deposits supported the growth in the net interest income. Higher auto lease income and increased investment banking fees drove the non-interest income.

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JPMorgan Chase’s results show that banks are still befitting from the higher interest rate. Citigroup (C) and Bank of America (BAC) could also gain from the higher interest rate. Sustained growth in lending and deposits is expected to drive their net interest income in the first quarter. However, challenges in the market-sensitive products are expected to remain a drag.

The higher net interest income, growth in investment banking fees, and share repurchases drove JPMorgan Chase’s first-quarter earnings, which beat analysts’ estimate. However, higher provisions remained a drag.

Financial metrics

JPMorgan Chase posted revenues of $29.9 billion in the first quarter, which increased ~5% on a YoY (year-over-year) basis and beat analysts’ estimate of $28.4 billion. JPMorgan Chase posted an adjusted EPS of $2.65, which beat analysts’ estimate of $2.35 and increased ~12% on a YoY basis. However, the provisions for credit losses increased by $330 million to $1.5 billion.

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