JPMorgan Chase, the country’s largest bank, expects to make money even as the outlook for the global economy has turned bleak due to threats such as inflation and the war in Ukraine.
At a company’s Investor Day event on Monday, bank officials predicted that JPMorgan would meet or exceed its financial targets sooner than expected due to rising interest rates, rising credit demand and volatile financial markets.
As the Federal Reserve raises its benchmark interest rate in hopes of taming rising prices, JPMorgan forecast its income from interest payments would grow to more than $56 billion this year, from $44.5 billion in the previous year, according to an investor presentation Year 2021. And it said trading revenue was likely to rise 15% to 20% year over year this quarter as clients cope with turbulent conditions that threatened to push the S&P into a bear market.
The bank’s shares rose more than 6 percent after executives announced their guidance, beating a 4 percent jump in a broader index of bank stocks.
“The big news to start the day was that JPMorgan’s revenue and profitability should be stronger this year than previously expected,” said Alison Williams, an analyst at Bloomberg Intelligence.
Even as the bank’s Chief Executive, Jamie Dimon, said the US economy had been boosted by “monetary and fiscal stimulus you’ve never seen before,” executives warned of potential challenges. The uncertainty facing many industries has impacted the once-hot corporate transaction market, and JPMorgan expects its investment banking fees to fall about 45 percent year over year this quarter, said Daniel Pinto, the company’s president.
“We are in a very challenging environment, so the market environment is uncertain,” said Mr. Pinto. “We’re navigating through things we haven’t seen in a long time.”
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