JPMorgan Chase beats by $0.44, beats on revs; provides FY25 guidance (227.11)
- Reports Q1 (Mar) earnings of $5.07 per share, $0.44 better than the FactSet Consensus of $4.63; reported revenues rose 8.0% year/year to $45.3 bln vs the $43.99 bln FactSet Consensus.
- Net interest income excluding Markets was $22.6 billion, down 2%, driven by the impact of lower rates and deposit margin compression as well as lower deposit balances in CCB. These were predominantly offset by higher revolving balances in Card Services, the impact of securities activity including activity in prior quarters, as well as higher wholesale deposit balances.
- Average loans up 1% YoY, down 1% QoQ; Card Services net charge-off rate of 3.58%
- The provision for credit losses was $3.3 billion. Net charge-offs were $2.3 billion, up $376 million, predominantly driven by Card Services. The net reserve build of $973 million included $549 million in Wholesale and $441 million in Consumer and was largely driven by changes in the weighted-average macroeconomic outlook. The prior-year provision was $1.9 billion, net charge-offs were $2.0 billion and the net reserve release was $72 million.
- CEO Jamie Dimon "This quarter, we repurchased $7 billion of common stock and announced a 12% increase in the common dividend. The increase in capital return was supported by our strong earnings generation and elevated capital levels. That being said, we continue to believe it is prudent to maintain excess capital and ample liquidity in this environment -- our CET1 ratio remained very strong at 15.4%, and we have an extraordinary amount of liquidity, with $1.5 trillion of cash and marketable securities." Dimon added: "The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and "trade wars," ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility. As always, we hope for the best but prepare the Firm for a wide range of scenarios." Dimon concluded: "We remain committed to serving our clients and communities, which include consumers, small and large-sized businesses, schools, cities, states and countries, across all environments. And our fortress balance sheet enables the Firm to be a pillar of strength, particularly during volatile or challenging times."
- Guidance: Expect FY2025 net interest income of ~$94 bln, market dependent. Expect FY2025 net interest income excluding Markets of ~$90 bln, market dependent. Expect FY2025 adjusted expense of ~$95 bln, market dependent. Expect FY2025 Card Services NCO rate of ~3.6%.