JPMorgan Chase believes that the boom in investment banking has exacerbated weak earnings


JPMorgan Chase CEO Jamie Dimon said that JPMorgan Chase may become one of the strongest quarters in transaction fees, which will help make up for weak loan growth and slower bank transaction revenue.

“Investment banking, this may be one of the best quarters we have seen,” Dimon said at a virtual conference hosted by Morgan Stanley on Monday.

“I will use a number, such as an increase of 20% last year [and] Last quarter. It may be 15-20%. The reason is that some big transactions may or may not be completed. ”

Since the middle of last year, Wall Street Bank has benefited from a surge in M&A activity. This is driven by the rise of special-purpose acquisition companies, large amounts of private equity capital seeking deals, large corporate buyers with ample cash, and strong debt and equity financing markets.

According to data from Refinitiv, JPMorgan Chase currently ranks among the best in global investment banking revenue, with slightly more than 5.5 billion U.S. dollars so far this year, up from 3.98 billion U.S. dollars a year ago. The bank’s share of expenses has also increased from 7.5% to 8.3%.

Dimon warned that the recent boom in fixed-income securities and stock trading has slowed this quarter.

“This quarter last year was very special. Last quarter was very special. This quarter is what I call more normal,” Dimon Say.

He predicts that the bank’s transaction revenue in the next quarter will be “a little more than $6 billion, which is still pretty good.”

One area of ​​concern for bank investors and analysts is the lack of growth in loans, which banks blamed on ample market liquidity and consumers holding cash from the US government and the US government’s stimulus plan. U.S. Federal Reserve.

Dimon said that banks are beginning to see loan growth “only a little bit.” He said that it will eventually pick up as the U.S. economy is strong.

Dimon also used his appearance at the conference to lower JPMorgan Chase’s forecast of net interest income for 2021 from approximately $55 billion to $52.5 billion, which he admitted was “a bit disappointing.” .

JPMorgan Chase announced its second-quarter earnings on July 13. Earnings increased fivefold in the first quarter.



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About the Author: Agnes Zang