{"id":112045,"date":"2021-04-14T13:01:52","date_gmt":"2021-04-14T13:01:52","guid":{"rendered":"https:\/\/fin2me.com\/?p=112045"},"modified":"2021-04-14T13:01:52","modified_gmt":"2021-04-14T13:01:52","slug":"jpmorgan-profit-leaps-after-reserve-release-boost","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/jpmorgan-profit-leaps-after-reserve-release-boost\/","title":{"rendered":"JPMorgan profit leaps after reserve release boost"},"content":{"rendered":"
(Reuters) -JPMorgan Chase & Co\u2019s earnings jumped almost 400% in the first quarter, blowing past estimates as the largest U.S. bank released more than $5 billion in reserves it had set aside to cover coronavirus-driven loan defaults.<\/p> The bank, widely seen as a barometer of the health of the broader U.S. economy, said consumer spending in its businesses had returned to pre-pandemic levels and was up 14% versus the first quarter of 2019.<\/p>\n The results, helped by favorable comparisons to last year, also gained from a 57% jump in investment banking revenue.<\/p>\n While the largest U.S. bank saw profits crimped last year with the economic effects of the pandemic, investors are optimistic that a recovery this year on the back of President Joe Biden\u2019s $1.9 trillion stimulus package and widespread vaccinations could restore normalcy.<\/p>\n \u201cWe believe that the economy has the potential to have extremely robust, multi-year growth,\u201d Chief Executive Officer Jamie Dimon said in a statement. \u201cOur credit reserves of $26 billion are appropriate and prudent, all things considered.\u201d<\/p>\n The bank\u2019s net income rose to $14.3 billion, or $4.50 per share, in the quarter ended March 31, from $2.9 billion, or 78 cents per share, a year earlier.<\/p>\n Analysts on average had expected earnings of $3.10 per share, according to Refinitiv.<\/p>\n Revenue jumped 14% to $33.1 billion.<\/p>\n JPMorgan changed its full-year outlook, saying it expects expenses to be slightly higher and net interest income to be lower. Revenue-related expenses rose in the first quarter, while interest rates remained near historic lows.<\/p>\n Investment banking revenue surged to $2.9 billion on record levels of capital markets activity, fueled largely by a surge in initial public offerings by special purpose acquisition companies.<\/p>\n Wall Street\u2019s boom has also been driven by record volumes of fundraising, debt refinancings, convertible bond deals and stock sales.<\/p>\n During the quarter, JPMorgan overtook investment banking powerhouse Morgan Stanley to become the banking world\u2019s second biggest provider of worldwide M&A advisory, according to Refinitiv. The league tables rank financial services firms by the amount of M&A fees they generate. Goldman Sachs continues to lead the rankings.<\/p>\n Global investment banking fees hit an all-time record during the March quarter, according to data from Refinitiv, and banks like JPMorgan made the most of the dealmaking boom.<\/p>\n JPMorgan\u2019s trading desks also trumped expectations, helped by the retail trading frenzy that has driven unprecedented rallies in \u201cmeme stocks\u201d including GameStop since January.<\/p>\n Overall trading revenue rose 37% to $10.1 billion, with bond trading up 15%. Equity markets revenue jumped 47%.<\/p>\n JPMorgan\u2019s shares were down 0.7% in pre-market trading.<\/p>\n Goldman Sachs Group Inc also beat Wall Street estimates with its profit report on Wednesday, with Wells Fargo & Co reporting later in the morning.<\/p>\n